LAWS  WITH  REGARD  TO  BANKS,  TRUST  COM- 
PANIES  AND  BUILDING  AND 
LOAN  ASSOCIATIONS 


Including  the  criminal  statutes  affecting  violations 
of  such  laws,  the  usury  laws,  and  the  laws  with  regard 
to  taxation  of  such  corporations. 


Compiled  by 


hprjrY  GF  TOt 

FEB  2  7  1933 

UNIVERSITY  Of  ILLINOIS 


M.  W.  McKenzie 

Attorney  for  the  State  Banking  Department, 
formerly  Assistant  Attorney  General. 


— *  | 


June,  1926 


V 


Digitized  by  the  Internet  Archive 
in  2019  with  funding  from 

University  of  Illinois  Urbana-Champaign  Alternates 


https://archive.org/details/bankingtrustcomp1926okla 


LAWS  WITH  REGARD  TO  BANKS,  TRUST  COM- 
PANIES  AND  BUILDING  AND 
LOAN  ASSOCIATIONS 


Including  the  criminal  statutes  affecting  violations 
of  such  laws,  the  usury  laws,  and  the  laws  with  regard 
to  taxation  of  such  corporations. 


FEB  2  7  1933 


UNIVERSITY  OF  ILLINOIS 

Compiled  by 

M.  W.  McKenzie 

Attorney  for  the  State  Banking  Department, 
formerly  Assistant  Attorney  General. 


June,  1926 


\ 


OKLAHOMA 

Laws  Relating  to  Banks,  Trust  Companies  and  Building 

and  Loan  Associations 

COMPILED 
19  2  6 


(y'fc  43  Jy~ 


QJ 

— I 


fO 

</) 


FOREWORD. 

The  laws  with  relation  to  banks,  trust  companies,  and  building 
and  loan  associations  may  be  found  in  the  Revised  Statutes  of  1910 
and  the  various  acts  of  the  legislature  beginning  with  the  year  1913 
and  ending  with  the  year  1925. 

These  various  laws  are  compiled  for  the  convenience  of  the 
State  Banking  Department.  On  account  of  the  many  changes  and 
the  numerous  amendments  to  these  laws,  it  has  not  been  possible 
to  follow  the  order  in  the  Compiled  Oklahoma  Statutes  of  1921. 
The  annotations,  however,  to  this  last  statute  are  included  in  the 
history. 

In  annotating  this  statute,  I  have  tried  to  follow  the  cases 
which  deal  exclusively  with  the  Sections  of  the  Statutes  under 
consideration.  I  have  made  an  effort  to  add  to  the  annotations 
the  various  opinions  of  the  Supreme  Court  touching  these  subjects, 
so  far  as  the  direct  Statute  may  be  involved. 


m.  w.  mckenzie. 


BANKS  AND  BANKING 
ORGANIZATIONS 

1.  Manner  of  Organizing.  Any  three  or  more  persons  approved 
by  the  bank  commissioner,  a  majority  of  whom  shall  be  residents  of 
this  State,  may  execute  articles  of  incorporation  and  be  incorporated 
as  a  banking  corporation  in  the  manner  hereinafter  provided.  Said 
articles  of  incorporation  shall  contain  the  corporate  name  adopted 
by  the  corporation,  which  shall  not  be  the  same  name  used  by  any 
corporation  previously  organized,  or  any  imitation  of  such  name; 
the  place  where  its  business  is  to  be  conducted;  the  purpose  for 
which  it  is  formed-,  the  amount  of  its  capital  stock,  which  shall  be 
divided  into  shares  of  the  par  value  of  one  hundred  dollars  each ; 
the  name  and  place  of  residence  of  and  number  of  shares  subscribed 
by  each  stockholder;  and  the  names  of  the  stockholders  selected  to 
act  as  the  first  board  of  directors,  each  of  whom  shall  be  a  bona 
fide  holder  of  at  least  five  hundred  dollars  of  the  stock  of  said 
bank,  fully  paid  and  not  hypothecated;  the  length  of  time  the  cor¬ 
poration  is  to  exist,  which  shall  not  exceed  twenty-five  years;  and 
such  other  matters  not  inconsistent  with  law  as  the  incorporators 
may  deem  proper.  Said  articles  of  incorporation  shall  be  sub¬ 
scribed  by  at  least  three  of  the  stockholders  of  the  proposed  bank¬ 
ing  corporation  and  shall  be  acknowledged  by  them  and  filed  in 
the  office  of  the  secretary  of  state,  and  a  copy  thereof,  duly  certi¬ 
fied  by  the  secretary  of  state,  shall  be  filed  with  the  bank  com¬ 
missioner.  The  secretary  of  state  shall  issue  a  certificate  in  the 
form  provided  by  law  for  other  corporations,  and  the  existence  of 
such  bank  as  a  corporation  shall  date  from  the  filing  of  its  articles 
of  incorporation  and  the  issuance  of  certificate  of  the  secretary  of 
state,  from  which  time  it  shall  have  and  may  exercise  the  powers 
conferred  by  law  upon  corporations  generally,  except  as  limited  or 
modified  by  this  chapter :  Provided,  that  such  bank  shall  transact 
no  business  except  the  election  of  officers  and  the  taking  and  ap¬ 
proving  of  their  official  bonds,  the  receipt  of  payments  on  account 
of  subscriptions  of  its  capital  stock,  and  such  other  business  as  is 
incidental  to  its  organization,  until  it  shall  have  been  authorized 
by  the  bank  commissioner  to  commence  the  business  of  banking  as 
hereinafter  provided. 

History.  Sec.  4114  C.  O.  S.  1921;  R.  L.  257;  S.  L.  1907-S,  p.  125. 

Charter  granted  under  old  law  was  not  repealed  oy  this  act.  Smock 
vs.  Bank,  22  Okla.  825,  98  Pac.  945. 

Purchaser  of  stock  may  compel  bank  to  transfer  it. 

Ardmore  Bank  vs.  Mason,  30  Okla.  568,  120  Pac.  1080. 

Bonus  note  by  bank  to  railroad  company  ultra  virses. 


10 


Mothersead,  Bank  Comm.,  v. 


Ry.  vs.  F.  &  M.  Bank,  21  Okla.  322,  96  Pac.  765. 

Bank  in  process  of  organization  may  receive  subscriptions  and  funds 
for  its  capital  stock  prior  to  obtaining  authority  to  do  business. 

Reeves  vs.  Noble,  88  Okla.  179,  212  Pai.  995. 

2.  Certificate  of  Organization — Reorganization.  When  the  cap¬ 
ital  stock  of  any  bank  shall  have  been  paid  up,  the  president  or  cash¬ 
ier  thereof  shall  transmit  to  the  bank  commissioner  a  verified  state¬ 
ment  showing  the  names  and  places  of  residence  of  the  stockholders, 
the  amount  of  stock  subscribed  and  the  amount  paid  in  by  each, 
and  the  bank  commissioner  shall  thereupon  have  the  same  power  to 
examine  into  the  condition  and  affairs  of  such  bank  as  if  it  had  be¬ 
fore  that  time  been  engaged  in  the  banking  business;  and  if  the 
commissioner  is  satisfied  that  such  bank  has  been  organized  as  pre¬ 
scribed  by  law,  and  that  its  capital  is  fully  paid,  and  that  it  has  in 
all  respects  complied  with  the  law,  he  shall  issue  to  such  bank  under 
his  hand  and  seal,  a  certificate  showing  that  it  has  been  organized, 
and  its  capital  paid  in  as  required  by  law,  and  is  authorized  to 
transact  a  general  banking  business ;  Provided,  that  in  the  reorgan¬ 
ization  of  a  bank  or  trust  company  the  assets  may  be  accepted  in 
lieu  of  cash  at  their  actual  value. 

History.  Sec.  4115  C.  O.  S.  1921;  R.  L.  258;  S.  L.  1907-8,  p.  126. 

Duty  of  Bank  Commissioner  under  this  section  to  issue  charter  when 
bank  is  organized  and  capital  paid  in.  Smock  vs.  Bank,  22  Okla.  825, 
98  Pac.  945. 

By  section  8  C.  137,  Sess.  L.  1923.  Issuance  of  certificate  rests  solely  in 
Commissioner  and  Board. 

BANKING  CORPORATIONS— DEPOSITS— LOANS 

Section  1.  That  Section  4116,  Compiled  Oklahoma  Statutes, 
1921,  be,  and  the  same  is  amended  to  read  as  follows: 

“  Section  4116.  A  banking  corporation  organized  under  the  pro¬ 
visions  of  this  chapter  shall  be  permitted  to  receive  money  on  de¬ 
posit,  and  to  pay  interest  thereon,  not  to  exceed  the  rate  that  may 
from  time  to  time  be  fixed  by  the  bank  commissioner,  as  the  max¬ 
imum  rate  that  may  be  paid  upon  deposits  by  banks  in  this  State ; 
to  buy  and  sell  exchange,  gold,  silver,  coin,  bullion,  uncurrent 
money,  bonds  of  the  United  States  or  this  State,  or  of  any  city, 
county,  school  district,  or  other  municipal  corporation  thereof,  and 
state,  county,  city,  township,  school  district  or  other  municipal 
indebtedness ;  to  lend  money  on  chattel  and  personal  security,  or  on 
real  estate  secured  by  first  mortgages,  running  not  longer  than  two 
years ;  provided,  that  such  real  estate  loans  shall  not  exceed  twenty 
(20%)  per  cent  of  the  aggregate  loans  of  any  such  bank;  to  own  a 
suitable  building,  furniture  and  fixtures,  for  the  transaction  of  its 
business,  the  value  of  which  shall  not  exceed  one-third  (1-3)  of  the 
capital  of  such  bank  fully  paid;  provided,  further  that  nothing  in 


Banking  Corporations — Deposits — Loans 


11 


this  section  shall  prohibit  such  bank  from  holding  and  disposing  of 
such  real  estate  as  it  may  acquire  through  the  collection  of  debts  due 
it ;  and  provided,  further,  that  all  banking  institutions  now  organ¬ 
ized  as  corporations  doing  business  in  the  state,  are  hereby  per¬ 
mitted  to  continue  said  business  as  at  present  incorporated;  but  in 
all  other  respects  their  business  and  the  manner  of  conducting  same 
and  the  operation  of  said  bank  shall  be  carried  on,  subject  to  the 
laws  of  this  state,  and  in  accordance  therewith;  and  provided,  fur¬ 
ther,  that  no  bank  except  those  that  have  complied  with  or  that 
may  be  organized  under  the  law  of  the  state,  relating  to  trust  com¬ 
panies,  shall  engage  in  any  business  other  than  in  authorized  by 
this  article.  ” 

History.  R.  L.  259:  S.  L.  1907-8,  p.  120;  amended  by  C.  59,  S.  L.  1923-24, 
Sec.  1. 

Bank  buying-  draft  with  bill  of  lading  attached,  not  engaged  in  Commerce. 

Marsh  M.  &  G.  vs.  Bank,  69  Okla.  222,  171  Pac.  1122. 

Contract  by  Bank,  to  pay  10%  interest  on  deposits  is  contrary  to  public 
policy  and  void. 

Morrison  State  Bank  vs.  Michael,  54  Okla.  257,  153  Pac.  1114. 

Rule  of  Bank  Commissioner. 

A  greater  rate  of  interest  than  4%  paid  on  time  certificates  or  savings 
accounts  will  not  be  approved. 

4.  Capital  Stock.  The  capital  stock  of  banks  organized  under 
the  provisions  of  this  article  shall  in  all  cases  be  fully  paid  up,  and 
shall  be  as  follows:  In  towns  having  five  hundred  inhabitants  or 
less,  not  less  than  ten  thousand  dollars ;  in  towns  having  more  than 
five  hundred  and  not  more  than  fifteen  hundred  inhabitants,  not 
less  than  fifteen  thousand  dollars;  in  cities  and  towns  having  more 
than  fifteen  hundred  and  not  more  than  six  thousand  inhabitants, 
not  less  than  twenty-five  thousand  dollars ;  in  cities  having  more 
than  six  thousand  and  not  more  than  twenty  thousand  inhabitants, 
not  less  than  fifty  thousand  dollars;  in  cities  having  more  than 
twenty  thousand  inhabitants,  not  less  than  one  hundred  thousand 
dollars. 

History.  Sec.  4117  C.  O.  S.  1921;  R.  L.  260;  S.  L.  1909,  p.  121. 

5.  Change  of  Capital  Stock.  The  capital  stock  of  any  banking 
association  doing  business  under  the  laws  of  this  state  may  be  in¬ 
creased  or  decreased  at  any  time  by  resolution  adopted  by  three- 
fourths  of  its  stockholders,  at  any  regular  meeting  or  at  a  special 
meeting  called  for  that  purpose,  of  which  all  stockholders  shall 
have  due  notice  in  the  manner  provided  by  the  by-laws  of  such 
banking  association.  A  certificate  must  be  filed  with  the  bank 
commissioner  by  the  chairman  and  secretary  of  the  meeting,  and 
by  a  majority  of  all  the  directors,  showing  the  compliance  with  the 
provisions  of  this  section,  the  amount  to  which  the  capital  stock 
has  been  increased  or  decreased,  the  amount  of  stock  represented  at 
the  meeting,  and  the  vote  upon  the  question  to  increase  or  de- 


12 


Mothersead,  Bank  Comm.,  v. 


crease  the  capital  stock.  No  such  changes  in  the  capital  stock  of 
any  such  association  shall  be  valid  or  binding  until  the  same  shall 
have  been  approved  by  the  bank  commissioner.  No  increase  of  the 
capital  stock  shall  be  approved  until  the  amount  thereof  shall  have 
been  paid  in  cash :  Provided,  however,  that  such  increased  capital 
may,  when  authorized  by  all  stockholders  of  said  bank,  be  paid 
in  whole  or  part  from  its  surplus  or  undivided  profits.  Whenever 
the  capital  stock  of  any  bank  shall  be  decreased  as  provided  in  this 
section,  each  stockholder,  owner  or  holder  of  any  stock  certificate 
shall  surrender  the  same  for  cancellation,  and  shall  be  entitled  to 
receive  a  new  certificate  for  his  proportion  of  the  new  stock.  No 
decrease  of  the  capital  stock  of  any  such  bank  shall  be  approved 
unless  such  bank,  with  reduced  capital,  shall  be  entirely  solvent, 
and  no  reduction  in  capital  stock  shall  be  approved  to  an  amount 
less  than  is  authorized  by  the  preceeding  section.  Whenever  the 
capital  stock  of  any  bank  shall  be  increased  or  decreased,  as  pro- 
vied  in  this  section,  and  the  same  shall  have  been  approved  by 
the  commissioner,  a  certificate  signed  by  the  president  and  cashier 
of  the  bank,  setting  forth  the  amount  of  stock  held  by  each  stock¬ 
holder,  shall  be  filed  with  the  secretary  of  state,  with  the  bank 
commissioner  and  with  the  corporation  commission. 

History.  Sec.  4118  C.  O.  S.  1921;  R.  L.  261;  S.  L.  1907-8,  p.  127. 

Increase  of  capital  by  officers  of  bank  without  authority  from  three- 
fourths  of  stockholders  at  a  regular  or  called  meeting,  is  void. 

State  ex  rel  vs.  Hardister,  108  Okla.  64,  237  Pac.  75. 

State  ex  rel  vs.  Zoll  (Okla.),  240  Pac.  1035. 

BOARD  OF  DIRECTORS— LIABILITY  OF. 

Section  2.  That  Section  4119,  of  the  Compiled  Oklahoma  Stat¬ 
utes,  1921,  be,  and  the  same  is  amended  to  read  as  follows: 

“Section  4119.  The  affairs  and  business  of  any  banking  asso¬ 
ciation,  organization  under  the  laws  of  this  State,  shall  be  managed 
or  controlled  by  a  board  of  directors  of  not  less  than  three  (3),  nor 
more  than  twenty-one  (21)  in  number,  who  shall  be  selected  from 
the  stockholders,  at  such  time  and  in  such  manner  as  may  be  pro¬ 
vided  by  the  by-laws  of  the  association.  No  person  shall  be  eligible 
to  serve  as  director  of  any  bank,  organized  or  existing  under  the 
laws  of  this  state,  unless  he  shall  be  a  bona  fide  owner  of  Five  Hun¬ 
dred  ($500.00)  Dollars  of  the  stock  of  such  bank,  fully  paid  and  not 
hypothecated.  Any  director,  officer  or  other  preson  who  shall 
participate  in  any  violation  of  the  laws  of  this  state,  relative  to 
banks  and  banking,  shall  be  liable  for  all  damages  which  the  said 
bank,  its  stockholders,  depositors  or  creditors  shall  sustain  in  con¬ 
sequence  of  such  violation,  and  the  directors  of  any  bank  operat- 


Board  of  Directors — Liability  of 


13 


ing  under  the  provisions  of  this  section,  shall  be  individually  liable 
for  any  loan  made  in  excess  of  the  amount  prescribed  in  Section 
4125,  which  section  defines  the  liability  of  loans  to  any  one  person, 
firm  or  corporation,  and  shall  be  required  to  eliminate  the  same  from 
the  assets  of  their  bank  upon  the  request  of  the  bank  commissioner. 
The  board  shall  select  from  among  their  number  the  president  and 
secretary,  and  shall  select  from  among  their  stockholders  a  cashier. 
Such  officers  shall  hold  their  offices  for  a  term  of  one  (1)  year  and 
until  their  successors  are  elected  and  qualified.  The  board  shall 
require  all  active  employees  of  all  state  banks,  to  give  Fidelity 
Bonds  to  the  State  of  Oklahoma,  as  provided  for  in  House  Bill  No. 
122,  Chapter  157,  of  the  Session  Laws  of  1923,  to  be  approved  by 
them,  and  held  by  the  State  Banking  Board.  The  Board  of  Direct¬ 
ors  shall  hold  at  least  six  (6)  regular  meetings  each  year,  and  at 
such  meetings  a  thorough  examination  of  the  books,  records,  funds 
and  securities  held  by  the  bank  shall  be  made  and  recorded  in  de- 
tial  upon  its  record  book,  twice  each  year.  A  certified  copy  thereof 
shall  be  forwarded  to  the  bank  commissioner  and  to  each  stock¬ 
holder  of  record  within  ten  (10)  days. 

History.  Sec.  4119  C.  O.  S.  1921;  R.  L.  259;  S.  L.  1907-8,  p.  120;  amended 
C.  59,  S.  L.  1923-24,  Sec.  2. 

Rule  of  Bank  Commissioner. 

More  attention  must  be  paid  to  the  matter  of  bookkeeping  and  your  rec¬ 
ords  must  be  kept  in  a  competent  and  intelligent  manner. 

In  the  future,  each  and  every  bank  must  hold  a  meeting  of  its  Board  of 
Directors  monthly.  A  record  of  this  meeting  must  be  kept  and  recorded 
in  the  Minute  Book  of  said  bank  and  a  copy  of  said  record  must  be 
mailed  to  the  Bank  Commissioner  immediately  after  said  meeting.  These 
minutes  must  be  signed  by  the  Directors.  This  rule  is  made  for  the 
reason  that  in  the  past  a  number  of  Directors  have  complained  to  the 
Commissioner  that  they  did  not  know  the  condition  of  the  banks  with 
which  they  were  connected  and  have  sought  to  evade  responsibility 
for  unsatisfactory  conditions.  Beginning  October  1st  each  bank  will 
report  fully  the  Directors’  Meeting  held  for  the  month  of  September. 

Bank  officer  has  only  such  authority  as  is  inherent  in  the  office  in  the 
absence  of  delegated  authority  from  Board  of  Directors. 

Bank  vs.  Hernstein,  48  Okla.  628,  149  Pac.  1109,  1  A.  L.  R.  619. 

Bank  vs.  Cromwell,  70  Okla.  199,  173  Pac.  826. 

Bank  officer,  who  induces  a  depositor  to  leave  his  money  on  deposit  by 
false  representations,  is  personally  liable  if  it  is  lost. 

Hughes  vs.  Martin,  81  Okla.  89,  196  Pac.  951. 

Affairs  and  Business  of  banks  are  managed  and  controlled  by  the  Board 
of  Directors. 

Bank  vs.  Hernstein  (supra). 

Bank  vs.  Cromwell  (supra). 

Bank  of  Quapaw  vs.  Flint,  97  Okla.  181,  223  Pac.  624. 

Bank  vs.  Bank,  56  Okla.  536,  156  Pac.  352. 

Eubanks  vs.  Bryan  County  Bank,  216  Fed.  833. 


14 


Mothersead,  Bank  Comm.,  v. 

Cashier  may  offer  evidence,  as  defense  when  sued,  that  all  his  acts  were 
done  openly,  with  full  knowledge  and  approval  of  other  officers  and 
also  with  approval  of  Banking  Department. 

Swim  vs.  Bank,  109  Okla.  226,  234  Pac.  611. 

7.  Employees  to  Make  Bond. 

All  persons  who  are  actively  engaged  in  the  State  Banking  Busi¬ 
ness  in  the  State  of  Oklahoma  and  all  active  employees  of  any  such 
bank  shall  from  and  after  the  passage  and  approval  of  this  Act 
give  fidelity  bond,  to  the  State  of  Oklahoma,  executed  by  a  sur¬ 
ety  company  in  the  amount  fixed  by  the  Bank  Commissioner,  and 
when  executed  to  be  approved  by  the  Bank  Commissioner  for  the 
faithful  performance  of  their  respective  duties  and  every  active 
officer  and  employee  of  such  State  Banks  shall  give  such  bond  with¬ 
in  thirty  days  after  such  officer  shall  become  active  as  an  officer 
or  employee  in  a  State  Bank  in  the  State  of  Oklahoma. 

History.  C.  157,  S.  L.  1923,  indirectly  repeals  that  part  of  section  4119 
C.  O.  S.  1921,  with  relation  to  fidelity  bond  of  bank  officials  and  em¬ 
ployees.  By  C.  59  Sess.  L.  1923-24  Board  of  Directors  required  also  to 
approve  Bond.  See  Sec.  6. 

Note:  Bank  Commissioner  has  ordered  all  banks  to  submit  fidelity  bonds 
to  board  of  directors  and  attach  carbon  copy  of  Minutes  signed  by  all 
members  present  and  approving  same,  or  a  copy  of  Minutes  certified 
by  secretary  of  bank,  as  a  true  copy,  under  seal  of  bank.  Form  of 
such  bond  prepared  and  approved  by  State  Banking  Department. 

Under  the  former  statute,  where  Directors  of  Banks  allow  cashier  to 
take  general  charge  of  Bank,  all  contracts  made  in  scope  of  powers  of 
bank  are  binding  on  it;  and  where  bank  sues  cashier  and  his  bondsmen 
guaranteeing  his  fidelity,  it  accepts  such  actions  of  cashier  subject  to 
representations  made  to  surety  by  cashier  in  obtaining  the  bond  and  if 
bond  was  obtained  by  cashier  by  fraud  it  is  not  enforcible. 

Maryland  Casualty  Co.  vs.  First  State  Bank,  101  Okla.  71,  215  Pac.  783. 

8.  Removal  of  Officers.  Any  officer  of  a  bank  found  by  the 
bank  commissioner  to  be  dishonest,  reckless  or  incompetent  shall 
be  removed  from  office  by  the  board  of  directors  of  the  bank  of 
which  he  is  an  officer,  on  the  written  order  of  the  bank  commission. 

History  Sec.  4120'  C.  O.  S.  1921;  R.  L.  263;  S.  L.  1907-8,  p.  129 

Bank  vs.  Haskell — 22  Okla.  81 — 97  Pac.  604. 

Rule  of  Bank  Commissioner: 

All  violations  of  the  banking  laws  will  necessitate  the  removal  of  the  of¬ 
fender. 

9.  Charter  Forfeited,  When.  The  violation  of  any  of  the  pro¬ 
visions  of  this  chapter  by  the  officers  or  directors  of  any  bank  or¬ 
ganized  or  existing  subject  to  the  laws  of  this  state  shall  be  suffi¬ 
cient  cause  to  subject  the  said  bank  to  be  closed  and  liquidated 
by  the  bank  commissioner  and  for  the  annulment  of  its  charter. 


Board  of  Directors — Liability  of 


15 


History.  Sec.  4121  C.  O.  S.  1921;  R.  L.  264;  S.  L.  1907-8,  p.  129 
Langford  vs.  Meneffe  45  Okla.  249,  145  Pac.  375 — Bank  vs.  Bank  56  Okla. 
529-156  Pac.  353. 

10.  Additional  Liability  of  Stockholders.  The  shareholders 
of  every  bank  organized  under  this  article  shall  be  additionally  lia¬ 
ble  for  the  amount  of  stock  owned,  and  no  more. 

History.  Sec.  4122  C.  O.  S.  1921;  R.  L.  265;  S.  L.  1907-8,  p.  129. 

As  general  rule  all  persons  whose  names  appear  on  books  of  bank  at  date 
of  failure  are  liable!  for  amount  of  stock  owned.  Board  vs.  State  ex  rel 
(Okla.)  242  Pac.  522.  Blackert  vs.  Lankford  74  Okla.  62-176  Pac. 
532  Lankford  vs.  Menefee  45  Okla.  244-127  Pac  1086.  Shaw  vs,  State 
is  rel.  (Okla.)  241  Pac.  747.  Thompson  vs.  State  (Okla.) 

Bona  fide  sale  of  stock  and  surrender  to  bank  officials  demanding  trans¬ 
fer  to  purchaser  will  relieve  the  vendor  from  liability  under  this  sec¬ 
tion  if  vendor  has  done  everything  required  of  him  in  law. 

State  ex  rel  vs.  Ware,  82  Okla^  130,  198  Pac.  860. 

Note — A  rule  of  the  Bank  Commissioner  requires  all  transfers  to  be 
submitted  to  him  for  approval. 

A  void  increase  of  capital  stock  of  a  bank  does  not  create  liability  under 
this  act. 

State  ex  rel.  vs.  Zoll.  (Okla.)  240  Pac.  1035. 

State  ex  rel.  vs.  Hardister  108  Okla.  64,  237  Pac.  75. 

Claims  against  an  insolvent  bank  cannot  be  set  off  by  a  stockholder  on 
his  super-added  or  double  liability. 

Kimbriel  vs.  State  106  Okla.  177-233  Pac.  420. 

11.  Securities  and  Disposition  Thereof.  No  bank  shall  em¬ 
ploy  its  moneys,  directly  or  indirectly,  in  trade  or  commerce,  by 
buying  or  selling  goods,  chattels,  wares  or  merchandise,  and  shall 
not  invest  any  of  its  funds  in  the  stock  of  any  othter  bank  or  cor¬ 
poration,  nor  make  any  loans  or  discounts  on  the  security  of  the 
shares  of  its  own  capital  stock,  nor  be  the  purchaser  or  holder 
of  any  such  shares,  unless  such  securities  or  purchase  shall  be  neces¬ 
sary  to  prevent  loss  upon  a  debt  previously  contracted  in  good  faith ; 
and  stock  so  purchased  or  acquired  shall,  within  six  months  from 
the  time  of  its  purchase,  be  sold  or  disposed  of  at  public  or  private 
sale,  and  after  the  expiration  of  six  months  any  such  stock  shall 
not  be  considered  as  part  of  the  assets  of  any  bank :  Provided,  that 
it  may  sell  any  personal  property  which  may  come  into  its  posses¬ 
sion  as  collateral  security  for  any  debt  or  obligation  due  it,  upon 
posting  a  notice  in  five  public  places  in  the  county  wherein  the 
property  is  to  be  sold  at  least  ten  days  before  the  time  therein 
specified  for  such  sale,  and  which  said  notice  shall  contain 
the  name  of  the  bank  and  the  name  of  the  pledgor,  the  date  of  the 
pledge,  the  nature  of  the  default  and  the  amount  claimed  to  be 
due  thereon  at  the  date  of  the  notice ;  a  description  of  the  pledged 
property  to  be  sold  and  the  time  and  place  of  sale. 

History.  Sec.  4123  C.  O.  S.  1921;  R.  L.  266;  S.  L.  1907-8,  p.  129. 


16 


Mothersead,  Bank  Comm.,  v. 

Bank  buying  draft  with  bill  of  lading  for  car  of  merchandise  attached 
is  not  engaged  in  trade  or  commerce. 

Grain  Co.  vs.  Bank,  69  Okla.  222-171  Pac.  1122. 

Bank  vs.  Bank  56  Okla.  536-156  Pac.  352. 

12.  Funds  on  Hand. 

Section  3.  That  Section  4124,  Compiled  Oklahoma  Statutes, 
1921,  be,  and  the  same  is  amended  to  read  as  follows: 

“Section  4124.  Every  bank  doing  business  under  the  laws  of 
this  State  shall  have  on  hand  at  all  times  in  available  funds  the 
following  sums,  to-wit:  Banks  located  in  towns  or  cities,  having 
a  population  of  less  than  2500  persons,  an  amount  equal  to  Fifteen 
(15%)  per  cent  of  their  entire  deposits,  and  in  towns  having  a 
population  of  more  than  2500  persons,  an  amount  equal  to  twenty 
(20%)  per  cent  of  their  entire  deposits,  two-thirds  of  which 
amounts  may  consist  of  balances  due  to  them  from  good,  solvent 
banks,  selected  from  time  to  time  with  the  approval  of  the  Bank 
Commissioner,  and  one-thrid  shall  consist  of  actual  cash;  provided, 
that  any  bank  that  has  been  made  the  depository  for  the  reserve 
of  any  other  bank  or  banks  shall  have  on  hand  at  all  times  in  the 
manner  provided  herein,  twenty-five  (25%)  per  cent  of  its  entire 
deposits.  Whenever  the  available  funds  in  any  bank  shall  be  be¬ 
low  the  required  amount,  such  bank  shall  not  increase  its  liabilities 
by  making  new  loans  or  discounts,  otherwise  than  the  discounting 
or  purchasing  of  bills  of  exchange,  payable  at  sight,  nor  make  any 
dividends  of  its  profits,  until  the  required  proportion  between 
the  aggregate  amount  of  its  deposits  and  its  lawful  money  reserve 
has  been  restored ;  and  the  Bank  Commissioner  shall  notify  any 
bank  whose  lawful  money  reserve  shall  be  below  the  amount  re¬ 
quired  to  be  kept  on  hand  to  make  good  such  reserve  and  if  such 
bank  or  association  shall  fail  to  do  so  for  a  period  of  thirty  (30) 
days  after  such  notice,  it  may  be  deemed  to  be  insolvent,  and  the 
Bank  Commissioner  may  take  possession  of  the  same,  and  proceed 
in  the  manner  herein  provided  relating  to  insolvent  banks.  The 
Bank  Commissioner  may  refuse  to  consider,  as  a  part  of  its  re¬ 
serve,  balance  due  to  any  bank  from  any  other  bank  association, 
which  shall  refuse  or  neglect  to  furnish  him  with  such  information 
as  he  may  require  from  time  to  time,  relating  to  its  business  with 
any  other  bank  doing  business  under  this  Act,  which  shall  enable 
him  to  determine  its  insolvency;  provided,  that  all  savings  asso¬ 
ciations  which  do  not  transact  a  general  banking  business,  except 
building  and  loan  associations,  shall  be  required  to  keep  on  hand 
at  all  times  in  actual  cash  a  sum  equal  to  ten  (10%)  per  cent  of 
their  deposits,  and  shall  be  required  to  keep  a  like  sum  invested 
in  good  bonds  of  the  United  States,  or  State,  County,  school  dis¬ 
trict  or  municipal  bonds  of  the  State  of  Oklahoma,  worth  not  less 
than  par.” 


Board  of  Directors — Liability  of 


17 


History.  Sess.  L».  1923-24  C.  59 — Sec.  3  amends.  Sec.  4124,  C.  O.  S. 
1921;  Amended  S.  L.  1915,  p.  97;  R.  L.  267. 

Note:  Bank  not  to  own  stock  of  another  bank.  Art.  IX,  Sec.  41  Const. 

Court  will  take  judicial  notice  of  the  population  of  a  town. 

Bank  vs.  Michael,  54  Okla.  257,  153  Pac.  1114. 

13.  Total  Liabilities. 

Section  4.  That  Section  4125,  Compiled  Oklahoma  Statutes, 
1921,  be,  and  the  same  is  amended  to  read  as  follows: 

“Section  4125.  The  total  liabilities  to  any  bank  of  any  person, 
corporation  or  firm  for  money  borrowed,  including  in  the  liabilities 
of  such  person,  corporation  or  firm  the  liabilities  of  the  several  stock¬ 
holders,  officers  or  members  thereof,  shall  not  at  any  time,  exceed 
fifteen  (15%)  per  cent  of  the  combined  capital  stock  and  surplus  of 
such  bank ;  but  the  discount  of  bills  of  exchange  drawn  in  good  faith 
against  actual  existing  values,  as  collateral  security  and  a  dis¬ 
count  of  commercial  or  business  paper,  actually  owned  by  the 
person,  shall  not  be  considered  as  money  borrowed;  provided, 
that  all  banks  now  operating  under  the  provision  of  this  section 
prior  to  the  present  amended  form,  may  have  twelve  (12)  months’ 
time  from  the  date  of  the  passage  of  this  Act,  in  which  to  reduce 
their  loans  to  meet  the  requirements  herein  set  forth.” 

History.  Sess.  L.  1923-24,  C.  59,  Sec.  3  amends.  Sec.  4125  C.  O.  S. 
1921;  R.  L.  268;  S.  L.  1907-8,  p.  131. 

Active  managing  officer  cannot  borrow  from  his  bank. 

Bank  vs.  Bank,  56  Okla.  529,  156  Pac.  352. 

Eubank  vs.  Bank,  216  Fed.  837. 

Rules  of  Bank  Commissioner. 

All  open  lines  of  credit  exceeding  $500.00  must  be  accompanied  by  cur¬ 
rent  financial  statements  of  the  makers  for  the  convenience  and  in¬ 
formation  of  our  examiners. 

All  cotton  accounts  carried  by  our  banks  must  be  secured  by  good  se¬ 
curities  and  a  margin  of  at  least  15%  must  be  maintained  at  all  times. 

All  other  commodities  by  a  margin  of  at  least  10%. 

All  excess  loans  must  be  retired  within  the  limit  prescribed  by  statute 
and,  in  the  future,  the  making  of  excess  loans  will  not  be  tolerated. 

14.  Banks  to  Make  Reports.  Every  bank  shall  make  at  least 
four  reports  each  year,  and  oftener  if  called  upon  by  the  Bank 
Commissioner  and  according  to  the  form  which  may  be  prescribed 
by  him,  verified  by  the  oath  or  affirmation  of  the  president  or 
cashier  of  such  association,  and  attested  by  the  signatures  of  at 
least  two  of  the  directors.  Each  such  report  shall  exhibit,  in  de¬ 
tail  and  under  appropriate  heads,  the  resources,  and  liabilities  of 
the  association  at  the  close  of  business  on  any  past  day  by  the 
bank  commissioner  specified,  and  shall  be  transmitted  to  the  bank 
commissioner  within  ten  days  after  the  receipt  of  a  request  or  re¬ 
quisition  therefor  by  him,  and  shall  be  published  at  the  expense 
of  the  bank  in  the  same  form  in  which  it  is  made  to  the  bank 


18 


Mothersead,  Bank  Commv  v. 


commissioner  within  ten  days  after  the  same  is  made,  by  two  in¬ 
sertions  in  a  newspaper  published  in  the  county  in  which  such 
bank  is  established;  and  such  proof  of  publication  shall  be  furn¬ 
ished  within  five  days  after  date  of  last  publication,  as  may  be 
required  by  the  bank  commissioner.  The  bank  commissioner  shall 
also  have  power  to  call  for  special  reports  from  any  bank  when¬ 
ever,  in  his  judgment,  the  same  are  necessary,  in  order  to  gain  a 
full  and  complete  knowledge  of  its  condition;  provided,  that  the 
reports  authorized  and  required  by  this  section  to  be  called  for  by 
the  bank  commissioner  shall  relate  to  a  date  prior  to  the  date  of 
such  call,  to  be  specified  therein. 

History.  Sec.  4130  C.  O.  S.  1921;  R.  L.  273;  S.  L.  1907-8,  p.  132. 

Applied: 

Bank  vs.  Bank  56,  Okla.  530,  156  Pac.  352. 

15.  Dividends  Reported.  In  addition  to  the  reports  required 
by  the  preceding  sections,  each  bank  doing  business  under  this 
chapter  shall,  within  ten  days  after  the  declaring  of  any  dividends, 
forward  to  the  bank  commissioner  a  statement  of  the  amount  of 
such  dividend,  and  the  amount  carried  to  the  surplus  and  undi¬ 
vided  profit  accounts,  and  shall  forward  to  the  bank  commissioner, 
within  ten  days  after  the  first  of  January  in  each  year,  in  such 
form  as  he  may  designate,  a  verified  statement  showing  the  re¬ 
ceipts  and  disbursements  of  such  bank  for  the  preceding  year. 

History.  Sec.  4131  C.  O.  S.  1921;  R.  L.  274;  S.  L.  1907-8,  p.  133. 

Applied:  Bank  vs.  Bank,  56  Okla.  536 — 156  Pac.  352. 

Bank  vs.  Haskell,  22  Okla.  48 — 97  Pac.  590. 

16.  Failure  To  Make  Reports — Penalty.  Every  bank  which 
fails  to  make  and  transmit  or  to  publish  any  report  required  un¬ 
der  either  of  the  two  preceding  sections,  shall  be  subject  to  a  pen¬ 
alty  of  fifty  dollars  for  each  day  after  the  period  respectively 
therein  mentioned,  that  it  delays  to  make  and  transmit  its  report 
or  the  proof  of  publication.  Whenever  any  bank  delays  or  re¬ 
fuses  to  pay  the  penalty  herein  imposed  for  a  failure  to  make  and 
transmit  or  to  publish  a  report,  the  commissioner  is  hereby  au¬ 
thorized  to  maintain  an  action  in  the  name  of  the  State  against 
the  delinquent  bank  for  the  recovery  of  such  penalty,  and  all  sums 
collected  by  such  action  shall  be  paid  into  the  treasury  of  the  state 
banking  board. 

History.  Sec.  4132  C.  O.  S.  1921;  R.  L.  275;  S.  L.  1907-8,  p.  133. 

17.  Bank  Commissioner  to  Take  Possession,  When — Effect. 

Any  bank  doing  business  under  this  chapter  may  place  its  affairs 
and  assets  under  the  control  of  the  bank  commissioner  by  posting 
a  notice  on  its  front  door  as  follows:  “This  bank  is  in  the  hands 


Board  of  Directors — Liability  of 


19 


of  the  state  bank  commissioner.’ ’  The  posting  of  such  notice, 
or  the  taking  possession  of  any  bank  by  the  bank  commissioner, 
shall  be  sufficient  to  place  all  of  its  assets  and  property  of  what¬ 
ever  nature  in  the  possession  of  the  bank  commissioner,  and  shall 
operate  as  a  bar  to  any  attachment  proceedings. 

History.  Sec.  4133  C.  O.  S.  1921;  R.  L.  276;  S.  L.  1907-8,  p.  133. 

This  and  similar  sections  to  be  liberally  construed. 

State  ex  rel  vs.  Norman,  86  Okla.  36,  206  Pac.  523. 

Placing-  affairs  of  Bank  in  hands  of  Bank  Commissioner,  gives  Com¬ 
missioner  no  rights  superior  to  holder  of  notes  and  mortgage  on  real 
estate,  where  no  funds  were  advanced  out  of  guaranty  Fund,  and 
holder  of  mortgage  may  have  receiver  appointed  for  real  estate  un¬ 
der  Sec.  4979  C.  O.  S.  21. 

State  ex  rel.  vs.  Wells,  98  Okla.  169,  223  Pac.  694. 

This  section  authorizes  the  Commissioner  to  take  all  assets  and  property 
of  the  bank. 

Kimbriel  vs.  State,  106  Okla.  177,  233  Pac.  422. 

18.  Voluntary  Liquidation.  Any  bank  doing  business  under 
this  chapter  may  voluntarily  liquidate  by  paying  off  all  its  de¬ 
positors  in  full;  and  upon  filing  a  verified  statement  with  the 
bank  commissioner  setting  forth  the  fact  that  all  its  liabilities 
have  been  paid,  and  surrendering  its  certificate  of  authority  to 
transact  a  banking  business,  it  shall  cease  to  be  subject  to  the  pro¬ 
visions  of  this  chapter,  and  may  continue  to  transact  a  loan  and 
discount  business  under  its  charter.  Provided,  that  the  bank 
commissioner  shall  make  an  examination  of  any  such  bank  for  the 
purpose  of  determining  that  all  its  liabilities  have  been  paid. 

History.  Sec.  4134  C.  O.  S.  1921;  R.  L.  277;  S.  L.  107-8,  p.  134. 

When  a  bank  voluntarily  liquidates  under  this  section,  all  debts  are  due. 

Bank  vs.  Bank  43  Okla.  342,  142  Pac.  1183. 

Where  bank  refuses  to  pay  off  a  creditor  but  pays  the  others,  the  cred¬ 
itor  aggrieved  may  ask  court  for  a  receiver. 

Bank  vs.  Bank,  43  Okla.  342,  142  Pac.  1183. 

19.  Deposits — Rate  of  Interest. 

Section  9.  That  Section  4175  of  Compiled  Oklahoma  Stat¬ 
utes,  annotated,  1921,  be  and  the  same  is  hereby  amended  to  read 
as  follows: 

“  Section  4175.  That  no  bank  operating  under  the  laws  of 
this  state,  or  the  officers  thereof,  shall  agree  directly  or  indirect¬ 
ly  to  pay  a  greater  rate  of  interest  than  four  per  cent  per  annum 
except  by  written  consent  of  the  Bank  Commissioner.” 

History.  Sec.  9,  C.  137,  S.  L.  1923;  amending  Sec.  4175  C.  O.  S.  1921. 

Old  sections  applied. 

Hughes  vs.  Martin  81  Okla.  89,  196  Pac.  952. 

In  re  Dennis,  89  Okla.  255,  214  Pac.  1074. 

Strain  vs.  U.  S.  F.  &  G.  Co.  292  Fed.  694. 


20 


Mothersead,  Bank  Commv  v. 


20.  Dividends  and  Surplus  Funds.  The  directors  or  owners 
of  any  bank  doing  business  under  this  chapter  may  declare  divi¬ 
dends  of  so  much  of  the  net  profits  of  their  bank  as  they  shall  judge 
expedient,  but  each  bank  shall,  before  the  declaration  of  a  divi¬ 
dend,  carry  not  less  than  one-tenth  of  its  net  profits  since  the  last 
preceding  dividend  to  its  surplus  fund,  until  the  same  shall  amount 
to  fifty  per  cent  of  its  capital  stock;  Provided,  that  such  divi¬ 
dends,  if  any,  shall  be  declared  on  the  first  day  of  January  and 
the  first  day  of  July  of  each  year,  and  shall  be  reported  to  the 
bank  commissioner  on  forms  prescribed  by  him. 

History.  Sec.  4136  C.  O.  S.  1921:  R.  L.  279;  S.  L.  1907-8,  p.  134. 

21.  Losses  Charged  to  Surplus  Account.  Any  losses,  sus¬ 
tained  by  any  bank,  in  excess  of  its  undivided  profits,  may  be 
charged  to  its  surplus  account :  Provided,  that  its  surplus  fund 
shall  thereafter  be  reimbursed  from  its  earnings,  and  no  dividend 
shall  be  declared  or  paid  by  any  such  bank  until  its  surplus  fund 
shall  be  fully  restored  to  its  former  amount. 

History.  Sec.  4137  C.  O.  S.  1921;  R.  L.  280;  S.  L.  1907-8,  p.  134. 

22.  Dividends  Only  From  Profits.  No  bank  officer  or  dir¬ 
ector  shall,  during  the  time  it  shall  continue  its  banking  opera¬ 
tions,  withdraw  or  permit  to  be  withdrawn,  either  in  the  form 
of  dividends  or  otherwise,  any  portion  of  its  capital.  If  losses 
have  been  at  any  time  sustained  by  such  bank  equal  to  or  exceed¬ 
ing  its  undivided  profits  then  on  hand,  no  dividend  shall  be  made, 
and  no  dividend  shall  be  declared  by  any  bank  while  it  continues 
its  banking  business  to  any  amount  greater  than  its  profits  on 
hand,  deducting  therefrom  its  losses,  to  be  ascertained  by  a  care¬ 
ful  estimate  of  the  actual  cash  value  of  all  its  assets  at  the  time 
of  making  such  dividends.  The  present  worth  of  all  maturing 
paper  shall  be  estimated  at  the  usual  discount  rate  of  the  bank. 
Nothing  in  this  section  shall  prevent  the  reduction  of  the  capital 
stock  of  any  bank  in  the  manner  prescribed  herein. 

History.  Sec.  4138  C.  O.  S.  19921;  R.  L.  281;  S.  L.  1907-8,  p.  134. 

23.  Certified  Checks.  It  shall  be  unlawful  for  any  offi¬ 
cer,  clerk  or  agent  of  any  bank  doing  business  under  this  chapter 
to  certify  any  check,  draft  or  order  drawn  upon  the  bank  unless 
the  person,  firm  or  corporation  drawing  such  check,  draft  or  or¬ 
der  has  on  deposit  with  the  bank  at  the  time  such  check,  draft 
or  order  is  certified  an  amount  of  money  equal  to  the  amount 
specified  in  such  check.  Any  check,  draft  or  order  so  certified 
by  the  duly  authorized  officer  shall  be  good  and  valid  obligation 
against  any  such  bank,  but  the  officer,  clerk  or  agent  of  any 
bank  violating  the  provisions  of  this  section  shall  be  deemed  guilty 


Board  of  Directors — Liability  of 


21 


of  a  felony,  and  upon  conviction  shall  be  punished  as  provided 
herein. 

History.  Sec.  4141  C.  O.  S.  1921;  R.  L.  284;  S.  L.  1907-8,  p.  135. 

Lodge  vs.  Bank,  64  Okla.  225,  166  Pac.  1080. 

24.  Liability  For  Overdrafts.  Any  bank  officer  or  employee 
who  shall  pay  out  the  funds  of  any  bank  upon  the  check,  order 
or  draft  of  any  individual,  firm,  corporation  or  association,  which 
has  not  on  deposit  with  such  bank  a  sum  equal  to  such  check,  or¬ 
der  or  draft,  shall  be  personally  liable  to  such  bank  for  the  amount 
so  paid,  and  such  liabilities  shall  be  covered  by  his  official  bond. 

History.  Sec.  4143  C.  O.  S.  1921;  R.  L.  286;  S.  L.  1907-8,  p.  136. 

25.  Preference  to  Depositors — Penalty. 

Section  1.  Section  2  of  Chapter  137  of  the  Session  Laws  of 
Oklahoma,  1923,  is  hereby  amended  to  read  as  follows: 

“  Section  2.  No  bank,  banker  or  bank  official  shall  give 
preference  to  any  depositor  or  creditor  by  pledging  the  assets  of 
the  bank  as  collateral  security  or  by  selling  or  transferring  any 
of  the  assets  of  an  insolvent  bank  in  consideration  of  any  deposit 
in  such  bank:  Provided,  any  bank  by  the  unanimous  consent  of 
its  board  of  directors  expressed  by  resolution  duly  entered  in  the 
minute  book  of  such  bank  may  pledge  the  assets  of  such  bank  as 
security  for  township,  city,  town,  school  district,  benevolent  or 
fraternal  association  funds  deposited  in  such  bank  in  all  cases 
where  no  surety  bond  is  given  to  secure  such  deposits;  provided, 
further,  that  any  bank  may  borrow  money  for  temporary  purposes, 
not  to  exceed  in  amount  50  per  cent  of  the  paid  up  capital  and 
surplus  and  may  pledge  assets  of  the  bank  as  collateral  security 
therefor;  provided,  further,  that  whenever  it  shall  appear  that  a 
bank  is  borrowing  habitually  for  the  purpose  of  reloaning,  the 
bank  commissioner  may  require  such  bank  to  pay  off  such  bor¬ 
rowed  money.  Nothing  herein  shall  prevent  any  bank  from  redis¬ 
counting  in  good  faith  and  endorsing  any  of  its  negotiable  notes. 
Provided,  further,  that  no  bank  shall  pledge  or  hypothecate  its 
notes  or  securities  as  security  for  the  deposits  herein  provided  for 
or  for  its  rediscounts  or  bills  payable  in  an  amount  sufficient  to 
create  a  margin  of  more  than  25  per  cent  of  the  amount  borrowed 
by  said  bank  without  the  written  consent  of  the  bank  commission¬ 
er  and  said  bank  commissioner  shall  not  in  any  event  give  written 
consent  to  the  pledging  of  hypthecation  of  any  excess  margin  of 
bank  notes  or  securities  in  a  sum  to  exceed  50  per  cent  of  the  amount 
borrowed.  Any  officer,  director  or  employe  of  any  state  bank  who 
violates  any  provision  of  this  section  shall  be  guilty  of  a  felony, 
and  upon  conviction  thereof,  shall  be  punished  by  a  fine  of  not 
less  than  $100.00  nor  more  than  $1,000.00,  or  by  imprisonment  in 


22 


Mothersead,  Bank  Comm.,  v. 


the  state  penitentiary  for  not  less  than  one  year  nor  more  than 
five  years,  or  both  such  fine  and  imprisonment. 

History.  S.  B.  401  C.  99,  Sec.  1,  S.  L.  1925,  amending-  Sec.  2,  C.  137, 
S.  L.  1923;  Sec.  4144  C.  O.  S.  1921;  R.  L.  287. 

Note,:  Pledging  assets  by  bank  was  unauthorized  except  to  secure  state  or 
county  Funds  until  this  section  became  law. 

Rule  of  Bank  Commissioner. 

In  the  future  banks  ’will  not  be  permitted  to  borrow  as  heavily  as  in  the 
past  for  the  purpose  of  re-loaning. 

Where  President  of  Bank  who  was  guardian  of  minors,  took  assets  from 
Bank  to  secure  a  deposit  of  funds  therein  belonging  to  said  minors, 
held  to  be  preference. 

Julius  vs.  State  ex  rel.  (Okla.)  237  Pac.  605. 

26.  Proceedings  When  Capital  Impaired.  Whenever  it  shall 
appear  that  the  capital  of  any  bank  doing  business  under  this 
chapter  has  become  impaired,  the  bank  commissioner  shall  notify 
such  bank  to  make  such  impairment  good  within  sixty  days,  and  it 
shall  be  the  duty  of  the  officers  and  directors  of  any  bank  receiv¬ 
ing  such  notice  from  the  bank  commissioner  to  immediately  call  a 
special  meeting  of  its  stockholders,  for  the  purpose  of  levying  an 
assessment  upon  its  stockholders  sufficient  to  cover  the  requirements 
of  its  capital  stock;  provided,  that  such  bank,  if  not  insolvent,  may 
reduce  its  capital  stock  to  the  extent  of  such  impairment,  if  such 
reduction  will  not  place  its  capital  below  the  amount  required  by 
this  article ;  provided,  further,  that  the  bank  shall  have  a  prior  lien 
upon  the  stock  of  each  individual  shareholder  to  the  extent  of  such 
assessment,  and  upon  the  failure  of  any  such  stockholder  to  pay  the 
assessment  authorized  by  this  section  within  the  time  fixed  by  the 
bank  commissioner  for  making  good  said  impairment  said  lien  may 
be  foreclosed  and  the  stock  of  such  delinquent  stockholder  sold, 
by  giving  public  notice  of  the  time  and  place  of  such  sale,  and  of 
the  stock  to  be  sold,  by  advertisement  for  fifteen  days  in  some 
newspaper  of  general  circulation  published  in  the  county  where 
such  bank  is  located. 

History.  Sec.  4145  C.  O.  S.  1921;  R.  L.  288;  S.  L.  1907-8,  p.  136. 

Payment  of  assessment  so  bank  can  continue  business  does  not  dis¬ 
charge  stockholder  from  double  liability  in  event  of  failure. 

Blackert  vs.  Lankford,  74  Okla.  61,  176  Pac.  532. 

Rule  of  Bank  Commissioner. 

Losses  which  have  been  determined  as  such  will  have  to  be  charged 
off  or  otherwise  eliminated  from  your  assets. 

27.  Bank  To  Keep  List  of  Shareholders.  The  president  and 
cashier  of  every  incorporated  bank  shall  cause  to  be  kept  at  all 
times  a  correct  list  of  the  names  and  residences  of  all  the  share¬ 
holders  in  the  bank  and  the  number  of  shares  held  by  each,  in  the 
office  where  its  business  is  transacted.  Such  list  shall  be  subject 
to  the  inspection  of  all  the  shareholders  and  creditors  of  the  bank, 


Board  of  Directors — Liability  of 


23 


and  the  officers  authorized  to  assess  taxes  under  the  state  author¬ 
ity,  during  business  hours  of  each  day  in  which  business  may  be 
legally  transacted.  A  copy  of  such  list,  verified  by  the  oath  of 
such  president  or  cashier,  shall  be  transmitted  to  the  bank  com¬ 
missioner  on  the  first  Monday  in  January  of  each  year. 

History.  Sec.  4147  C.  O.  S.  1921;  R.  L.  290;  S.  L.  1907-8,  p.  137. 

Cited.  Blackert  vs.  Lankford  74  Okla.  61,  176  Pac.  532. 

Chaplin  vs.  Bank  72  Okla.  193,  181  Pac.  497. 

Eubank  vs.  Bank  216  Fed.  837. 

28.  National  Banks  May  Become  State  Banks.  Any  national 

bank  doing  business  in  this  state  may  incorporate  as  a  state  bank, 
as  provided  herein  for  the  organization  of  banks;  provided,  that 
the  bank  commissioner  may  accept  good  assets  of  such  national 
bank  worth  not  less  than  par,  in  lieu  of  cash  payment  for  the  stock 
of  such  state  bank. 

History.  Sec.  4146  C.  O.  S.  1921;  R.  L.  289;  S.  L.  1907-8,  p.  137. 

29.  Commissioner  May  Revoke  Permit.  Whenever  any  offi¬ 
cer  of  a  bank  shall  refuse  to  submit  the  books,  papers  and  effects 
of  such  bank  to  the  inspection  of  the  commissioner  or  his  assistant, 
or  shall  in  any  manner  obstruct  or  interfere  with  him  in  the  dis¬ 
charge  of  his  duties,  or  refuse  to  be  examined  on  oath  touching 
the  affairs  of  the  bank,  the  commissioner  may  revoke  the  author¬ 
ity  of  such  bank  to  transact  a  banking  business,  and  proceed  to 
wind  up  its  business. 

History.  Sec.  4148  C.  O.  S.  1921;  R.  L.  291;  S.  L.  1907-8,  p.  137. 

30.  Penalty  For  Receiving  Deposits  After  Revocation  of 
Charter.  Any  officer  of  a  bank  whose  authority  to  tranact  a 
banking  business  has  been  revoked,  as  herein  provided,  who  shall 
receive  or  cause  to  be  received  any  deposit  of  whatsoever  nature 
after  such  revocation,  shall  be  subject  to  the  same  penalty  provided 
for  persons  transacting  a  banking  business  without  authority. 

History.  Sec.  4149  C.  O.  S.  1921;  R.  L.  292;  S.  L.  1907-8,  p.  137. 

31.  Real  Estate — Bank  May  Purchase. 

Section  5.  That  Section  4150  of  the  Compiled  Oklahoma  Stat¬ 
utes  annotated,  1921,  be  and  the  same  is  hereby  amended  to  read 
as  follows : 

“Section  4150.  A  bank  may  purchase,  hold  and  convey  real 
estate  for  the  following  purposes: 

First.  Such  as  shall  be  necessary  for  the  convenient  trans¬ 
action  of  its  business,  including  its  furniture  and  fixtures,  but 
which  shall  not  exceed  one-third  of  the  paid  in  capital,  except  up- 


24 


Mothersead,  Bank  Commv  v. 

on  the  written  approval  of  the  Bank  Commissioner  countersigned 
by  the  Banking  Board. 

Second :  Such  as  shall  be  conveyed  to  it  in  satisfaction  of  debts 
previously  contracted  in  the  course  of  its  business. 

Third:  Such  as  it  shall  purchase  at  sale  under  judgment,  de¬ 
cree,  or  mortgage  foreclosure,  under  securities  held  by  it;  but 
a  bank  shall  not  bid  at  any  such  sale,  a  larger  amount  than 
enough  to  satisfy  its  debts  and  costs.  Real  estate  shall  be  con¬ 
veyed  under  the  corporate  seal  of  the  bank  and  the  hands  of  its 
president  or  vice-president  and  cashier.  No  real  estate  acquired 
in  the  cases  contemplated  in  the  second  and  third  sub-sections 
above  shall  be  held  for  a  longer  time  than  five  years.  It  must 
be  sold  at  a  private  or  public  sale  within  thirty  days  thereafter. 

History.  Sec.  5,  C.  137,  S.  L.  1923;  amending  Sec.  4150,  C.  O.  S.  1921; 

R.  L.  293:  S.  L.  1907-8,  p.  138. 

In  case  of  failure  the  Bank  Commissioner  acquires  only  the  interest 

of  the  bank  in  its  property. 

Bailey  vs.  State  72  Okla.  179  Pac.  615. 

Bank  vs.  Lee  65  Okla.  280,  166  Pac.  186. 

Briscoe  vs.  Hamer  50  Okla.  287,  150  Pac.  1101. 

State  vs.  Wells  98  Okla.  169,  223  Pac.  694! 

32.  Shares  Personal  Property — Transfer.  The  shares  of 
stock  of  an  incorporated  bank  shall  be  deemed  personal  property, 
and  shall  be  transferred  on  the  books  of  the  bank  in  such  man¬ 
ner  as  the  by-laws  therefor  may  direct,  but  no  transfer  of  stock 
shall  be  valid  against  a  bank  or  any  creditor  thereof  so  long  as 
the  registered  holder  thereof  shall  be  liable  as  a  principal  debtor, 
surety  or  otherwise  to  the  bank  for  any  debt,  nor  in  such  cases 
shall  any  dividend,  interest  or  profits  be  paid  on  such  stock  so 
long  as  such  liabilities  continue,  but  all  such  dividends,  interests 
or  profits  shall  be  retained  by  the  bank  and  applied  to  the  dis¬ 
charge  of  such  liabilities,  and  no  stock  shall  be  transferred  on  the 
books  of  any  bank  where  the  registered  holder  thereof  is  in  debt 
to  the  bank  for  any  matured  and  unpaid  obligations. 

History.  Sec.  4151  C.  O.  S.  7921;  R.  L.  294;  S.  L.  1907-8,  p.  138. 

No  transfer  of  stock  without  the  approval  of  the  Bank  Commissioner 

will  be  permitted. 

If  Bank  recognizes  transfer  and  issues  stock  to  purchaser,  it  waives  lien. 

Bank  vs.  Trust  Co.  32  Okla.  700,  123  Pac.  153. 

Bank  loaned  money  to  officer  in  violation  of  law.  Not  entitled  to  lien 

as  against  pledge  who  had  no  knowledge  of  debt  due  bank. 

Bank  vs.  Bank,  56  Okla.  529,  156  Pac.  352. 

Eubank  vs.  Bank,  216  Fed.  837. 

Transfer  invalid  if  stockholder  owes  Bank. 

Chaplin  vs.  Bank  72  Okla.  293,  181  Pac.  497. 

State  vs.  Ware,  82  Okla.  131,  198  Pac.  860. 


Board  of  Directors — Liability  of 


25 


TO  ALL  STATE  BANKS: 

In  view  of  the  fact  that  banks  frequently  change  hands  and  new  offi¬ 
cers  are  elected  without  giving  the  Commissioner  an  opportunity  to 
investigate  their  moral  and  financial  standings,  as  well  as  their  busi¬ 
ness  qualifications,  you  are  advised  that  this  practice  is  a  violation 
of  the  spirit  of  the  banking  law  and,  in  future,  where  such  changes 
are  anticipated  by  sale,  consideration  or  otherwise,  same  must  be 
reported  'to  this  office  promptly  for  approval,  both  as  to  ownership 
and  officials. 

Ocicials  elected  in  violation  of  the  above  ruling  will  be  removed  from 
office. 


No  transfer  of  stock  without  the  approval  of  the  Bank  Com¬ 
missioner  will  be  permitted. 

33.  Bank  Cannot  Loan  on  its  Stock — Loans  to  Stockholders. 

It  shall  be  unlawful  for  any  bank  to  loan  its  funds  to  its  stock¬ 
holders  on  their  stock  as  collateral  security;  and  the  total  indebt¬ 
edness  of  the  stockholders  of  any  bank  shall  at  no  time  exceed 
fifty  per  cent  of  its  paid  up  capital;  provided,  that  any  bank  may 
hold  its  stock  to  secure  a  debt  previously  contracted. 

History.  Sec.  4152  C.  O.  S.  1921;  R.  L.  295;  S.  L.  1927-8,  p.  138. 

Pledgee  without  notice  of  stockholders  debt  to  bank  can  hold  stock. 

Bank  vs.  Bank  56  Okla.  529,  156  Pac.  352. 

Eubank  vs.  Bank  216  Fed.  838. 

34.  When  Deemed  Insolvent.  A  bank  shall  be  deemed  to  be 
insolvent,  first,  when  the  actual  cash  market  value  of  its  assets  is 
insufficient  to  pay  its  liabilities;  second,  when  it  is  unable  to  meet 
the  demands  of  its  creditors  in  the  usual  and  customary  manner; 
third,  when  it  shall  fail  to  make  good  its  reserve  as  required  by 
law. 

History.  Sec.  4135  C.  O.  S.  1921;  R.  L.  278;  S.  L.  1907-8,  p.  134. 

Section  applies  to  banks  for  civil  purposes — not  for  criminal  prosecutions. 

Appleget  vs.  State  (Okla.)  243  Pac.  251. 

Kimbriel  vs.  State  106  Okla.  177,  233  Pac.  422. 

35.  Commissioner  to  Provide  Blanks  and  Preserve  Records. 

For  the  purpose  of  carrying  into  effect  the  provisions  of  this 
chapter,  the  bank  commissioner  shall  provide  a  form  for  the  ne¬ 
cessary  blanks  for  such  examinations  and  reports ;  and  all  examina¬ 
tions  and  reports  received  by  him  shall  be  preserved  in  his  office. 

History.  Sec.  4153  C.  O.  S.  1921;  R.  L.  296:  S.  L.  1907-8,  p.  138. 


26 


Mothersear,  Bank  Commv  v. 

RULES  OF  BANK  COMMISSIONER 


Banks  will  not  be  permitted  to  pay  interest  on  checking  accounts  of  in¬ 
dividuals,  firms  or  corporations:  provided  that  this  shall  not  apply  to 
a  deposit  of  funds  of  the  government,  state,  county,  city,  town,  school 
district,  township  or  other  funds  that  may  be  protected  as  provided 
by  law. 

Any  state  bank  official,  director,  stockholder,  employee  or  agent  violat¬ 
ing  any  of  the  above  rules,  either  directly  or  indirectly,  will  be  subject 
to  removal  and  such  punishment  as  is  provided  by  law. 

By  resolution  of  the  Banking  Board,  application  for  a  charter  for  a 
state  bank  will  not  be  considered  upon  a  capital  of  less  than  Fifteen 
thousand  Dollars,  without  regard  to  population,  and  no  application 
to  reduce  the  capital  of  any  bank  below  Fifteen  Thousand  Dollars 
will  be  considered. 

All  rules  and  regulations,  as  promulgated  by  the  the  Bank  Commissioner, 
were  executed  in  order  to  safe-guard  and  protect  State  Banks  from 
future  trouble,  and  the  Bank  Commissioner  insists  that  all  such  rules 
and  regulations  be  complied  with  to  the  letter. 

36.  State  Depositories.  Any  bank  or  trust  company  which 
has  complied  with  the  provisions  of  this  chapter,  or  any  national 
bank  located  in  this  state,  shall  be  eligible  to  act  as  a  depository 
of  state  funds,  of  any  fund  under  the  control  of  the  state  or  any 
officer  thereof,  upon  compliance  with  the  laws  of  this  state  relating 
to  the  deposits  of  public  funds. 

History.  Sec.  4170  C.  O.  S.  1921;  R.  L.  307;  S.  L.  1907-8,  p.  142. 

Cited — Lankford  vs.  Menefee  45  Okla.  249,  145  Pac.  382. 

37.  State  Treasurer — State  Depositors. 

Section  5.  That  Section  8605,  Compiled  Oklahoma  Statutes, 
1921,  be,  and  the  same  is  hereby  amended  to  read  as  follows: 

“  Section  8605.  The  state  treasurer  is  hereby  authorized  and 
directed  by  and  with  the  consent  of  the  Governor  and  attorney 
general  to  select  a  number  of  banks  within  the  State  of  Oklahoma 
as  depositors  of  the  public  funds  of  the  state;  such  banks  must  be 
in  good  standing  and  conducting  a  regular  banking  business  and 
they  shall  pay  to  the  state,  interest  at  the  rate  of  three  (3)  per 
cent,  per  annum,  on  daily  balances,  and  shall  collect  free  of  charge 
to  the  state,  such  drafts,  bills  of  exchange  and  checks  as  may  be 
deposited  by  the  state  in  the  regular  course  of  business,  and  shall 
pay  all  checks  and  drafts  legally  authorized  and  duly  drawn  on 
the  state  funds  deposited  in  such  bank.  There  shall  not  be  deposit¬ 
ed  in  any  one  of  such  banks,  of  the  state  funds,  an  amount  to  ex¬ 
ceed  the  capital  stock  of  any  such  bank.  Such  banks  shall  make 
quarterly  reports  of  the  fiscal  year  of  the  amount  deposited  and 
checked  out  or  withdrawn  and  the  balance  on  hand,  including  ac¬ 
crued  interest  belonging  to  the  state.  ’  ’ 

History.  Sec.  5,  C.  59,  S.  L.  1924;  amending  Sec.  8605  C.  O.  S.  1921;  R. 
Li.  6779,  S.  L.  1905;  p.  338. 


Board  of  Directors — Liability  of 


27 


38.  Securities  for  State  Deposits — Kinds  Accepted.  Any  and 

all  banks  selected  as  such  depositories  shall  deposit  with  the  state 
treasurer,  as  security  for  such  moneys  or  funds,  United  States 
bonds,  state  bonds,  or  warrants,  county  bonds  or  warrants-  city 
bonds  or  warrants,  town  bonds  or  warrants,  township  bonds  or 
warrants,  school  district  bonds  or  warrants  issued  under  authority 
and  in  compliance  with  the  Statutes  of  Oklahoma;  or  other  legal 
evidence  of  indebtedness  issued  by  municipalities  of  this  state  in 
payment  of  paving,  sewer,  waterworks,  electric  light  or  other  pub¬ 
lic  indebtedness,  and  for  the  payment  of  which  a  special  tax  is 
authorized  to  be  levied  and  collected ;  first  mortgage  bonds  on  farm 
lands  located  in  the  State  of  Oklahoma;  provided,  that  such  first 
mortgage  bonds  shall  not  exceed  forty  per  centum  (40%)  of  the 
actual  cash  value  of  such  farm  lands,  and  shall  bear  interest  at  not 
less  than  six  per  centum  (6%)  per  annum;  or  approved  state, 
county  and  municipal  bonds  of  other  states;  in  an  amount  equal 
to  such  deposit,  to  be  held  as  security  for  such  moneys  and  funds 
until  such  banks  shall  have  returned  in  full  and  fully  paid  the  sum 
or  sums  deposited  and  interest  thereon.  In  addition  to  the  fore¬ 
going  securities  or  in  lieu  thereof,  surety  or  trust  company  bonds 
may  be  accepted  as  security  for  such  deposit;  provided,  that  no 
surety  or  trust  company  shall  be  interested,  directly  or  indirectly 
in  any  manner,  in  any  bank  or  trust  company  for  which  it  be¬ 
comes  surety,  nor  shall  any  bond  of  any  surety  or  trust  company 
be  accepted  that  has  more  than  one-fourth  (%%)  of  its  paid  cap¬ 
ital  invested  in  bank  stock.  The  bondsmen  of  the  state  treasurer 
shall  be  liable  to  the  bank  for  any  securities  deposited  as  herein 
provided  and  for  the  accounting  of  all  such  securities  and  the  re¬ 
turn  thereof  to  the  said  bank  or  the  value  thereof  in  money. 

History.  Sec.  8606  C.  O.  S.  1921;  S.  L.  1915,  p.  636,  Sec.  1,  amending-  R. 

L.  6780. 

39.  Approval  of  Securities — Forfeiture  and  Sale.  It  shall  be 
the  duty  of  the  governor,  the  attorney  general  and  the  state  treas¬ 
urer  to  examine,  and  if  found  satisfactory,  to  approve  such  security 
so  offered;  and  the  expenses  of  such  investigation,  if  any,  shall 
be  paid  by  the  bank  offering  the  securities.  In  the  event  of  default 
of  such  bank  designated  and  approved  as  a  state  depository,  the 
said  securities  shall  become  forfeited  to  and  become  the  property 
of  the  state,  and  shall  be  sold  by  the  state  treasurer  after  sixty 
days’  notice,  at  public  or  private  sale,  at  not  less  than  par  value 
or  market  value,  without  further  process  of  law.  Should  the  pro¬ 
ceeds  of  the  sale  of  such  securities  be  less  in  amount  than  the 
amount  deposited,  accrued  interest,  expenses  of  advertising  and 
selling,  the  said  state  treasurer  shall  be  entitled  to  recover  from 
such  bank  such  balances  with  costs  and  attorney’s  fee. 

History.  Sec.  8607  C.  O.  S.  1921;  R.  L.  6781;  S.  L.  1905,  p.  339. 

40.  Deposit  of  Sinking  Funds. 


28  Mothersead,  Bank  Comm.,  v. 

Section  1.  That  Section  8577,  of  the  Compiled  Oklahoma 
Statutes,  1921,  be  and  the  same  is  hereby  amended  to  read  as 
follows : 

“Section  8577.  That  county  treasurer,  treasurers  of  cities, 
towns,  boards  of  education  and  township  boards,  shall  each  day 
hereafter  make  a  deposit  of  all  uninvested  sinking  fund  money 
in  their  hands  in  banks  designated  by  the  Board  of  County  Com¬ 
missioners  as  County  Depositories  and  furnishing  the  security 
now  required  by  law,  at  not  less  than  three  (3%)  per  cent  in¬ 
terest,  per  annum,  on  daily  REALIZED  balances.” 

History.  Sec.  1,  S.  B.  243,  C.  62  S.  L.  1925;  amending  Sec.  8577  C.  O. 

S.  1921;  S.  L.  1915,  p.  147.  Act  approved  March  31,  1925. 

COUNTY  DEPOSITORIES 

41.  County  Treasurer — Deposits — Amounts. 

Section  1.  That  Section  5727,  Compiled  Oklahoma  Statutes, 
1921,  be,  and  the  same  is  hereby  amended  to  read  as  follows: 

“Section  5727.  In  all  counties,  the  County  Treasurer  shall  de¬ 
posit  daily  all  the  funds  and  money  of  whatsoever  kind  that  shall 
come  into  his  possession  by  virtue  of  his  office  as  such  County 
Treasurer  in  his  name  as  such  County  Treasurer  in  One  (1)  or 
more  banks  located  in  the  county  and  designated  by  the  Board  of 
County  Commissioners  as  the  County  Depositories;  provided,  that 
there  shall  not  be  deposited  of  such  funds  in  any  One  (1)  bank  at 
one  (1)  time  a  greater  amount  than  the  capital  stock  and  surplus  of 
said  bank.  Such  bank  shall  receive  all  moneys,  checks  or  drafts  at 
par  and  pay  interest  on  the  average  daily  realized  balances  at  the 
rate  of  not  less  than  three  (3%)  per  annum,  and  shall  pay  the 
same  monthly  to  the  County  Treasurer.  Before  directing  or  au¬ 
thorizing  the  deposit  of  any  such  funds  aforesaid,  the  Board  of 
County  Commissioners  shall  take  from  each  such  bank  a  surety 
bond  of  some  surety  company  authorized  by  the  proper  authorities 
of  the  State  of  Oklahoma  to  do  business  in  said  State,  in  a  sum 
equal  to  the  largest  approximate  amount  that  may  be  deposited 
in  each  respectively,  at  any  one  time ;  said  surety  bond  to  be  uni¬ 
form  and  prescribed  by  the  Attorney  General  of  the  State.  Pro¬ 
vided,  that  in  lieu  of  said  surety  bond  or  in  addition  thereto,  se- 
curety  may  be  taken  consisting  of  United  States  Bonds,  State 
Bonds*  or  Warrants,  County  Bonds  or  Warrants,  or  other  bonds 
or  warrants  issued  by  any  municipality  under  authority  of  and 
in  compliance  with  the  Statutes  of  Oklahoma;  provided,  that  all 
said  warrants  shall  have  been  issued  pursuant  to  a  legal  appro¬ 
priation.  All  surety  bonds  taken  under  the  provisions  of  this  Act 
shall  bear  the  approval  of  the  County  Attorney  and  the  Board 
of  County  Commissioners  and  all  securities  accepted  in  lieu  of  surety 
bonds  shall  bear  the  approval  of  the  County  Judge  and  the  County 


County  Depositors 


29 


Attorney.  The  County  Commissioners  shall  provide  for  the  Coun¬ 
ty  Treasurer,  a  safe  and  secure  receptacle  and  place  for  the  safe 
keeping  of  said  securities  mentioned  herein  in  lieu  of  a  surety 
bond..  It  shall  be  unlawful  for  said  county  treasurer  to  leave  said 
securities  in  the  custody  of  or  deposit  same  in  the  bank  furnish¬ 
ing  the  same,  but  shall  keep  the  same  in  his  custody  at  the  county 
court  house,  where  the  same  shall  be  subject  to  inspection  at  any 
time,  or  .  in  some  safe  place  designated  by  the  Board  of  County 
Commissioners,  and  the  State  Examiner  and  Inspector  when  ex¬ 
amining  a  county  treasurer’s  records  shall  in  addition  to  his  other 
duties  examine  said  office  with  a  view  of  seeing  that  the  pro¬ 
visions  of  this  Act  are  complied  with,  and  it  shall  be  the  duty  of 
said  State  Examiner  and  Inspector  if  he  shall  find  that  the  pro¬ 
visions  of  this  Act  are  being  violated,  to  at  once  file  a  written  re¬ 
port  of  such  condition  with  the  county  attorney  of  said  county, 
and  provided,  further,  that  said  securities  and  surety  bond  shall 
be  at  all  times  in  the  custody  and  under  the  control  of  the  County 
Treasurer.  The  condition  of  said  bond  shall  be  that  such  deposit 
shall  be  promptly  paid  on,  a  check  or  draft  of  the  Treasurer  of  such 
county,  and  the  bondsmen  of  such  Treasurer  shall  not  be  liable 
for  such  deposit.  And  such  banks  shall  on  the  first  Monday  of 
each  month  file  with  the  County  Clerk  of  such  County  a  statement 
of  the  amount  of  money  on  hand  belonging  to  the  County  at  the 
close  of  business  each  day  during  the  previous  month  and  the 
amount  of  interest  accrued  thereon  to  such  date.  Provided,  that 
nothing  in  this  Act  shall  be  construed  to  prohibit  the  County 
Treasurer  from  depositing  funds  of  the  County  in  banks  outside 
of  the  county  in  cases  of  emergency  and  when  such  bank  shall 
place  with  the  County  Treasurer  the  same  class  of  security  as 
hereinbefore  provided,  then  the  County  Treasurer  is  hereby  au¬ 
thorized  to  deposit  any  surplus  funds  in  his  hands  with  the  State 
Treasurer  as  official  depository  and  the  State  Treasurer  as  of¬ 
ficial  depository  is  hereby  authorized  to  receive  said  county  de¬ 
posits,  the  same  to  be  withdrawn  on  the  voucher  of  the  office  de¬ 
positing  the  same,  and  the  interest  earned  on  said  deposit  to  be 
credited  to  the  account  earning  the  same.  It  is  hereby  made  un¬ 
lawful  for  any  of  the  county’s  funds  to  be  deposited  in  any  bank 
in  which  County  Treasurer  or  any  member  of  the  Board  of  County 
Commissioners  shall  be  the  owner  of  any  stock  or  otherwise  pe¬ 
cuniarily  interested.” 

Violation  of  Act — Felony. 

Section  2.  Any  county  treasurer  violating  any  of  the  pro¬ 
visions  of  this  Act  shall  be  guilty  of  a  felony  and  upon  convictioD 
shall  be  punished  by  confinement  in  the  State  Penitentiary  for  a 
term  not  less  than  one  year  nor  more  than  four  years. 

History.  S.  L.  1925,  C.  88,  with  Emergency  approved  April  2,  1925. 


30 


Mothersead,  Bank  Comm._,  v. 


Under  prior  act  County  Commissioners  had  no  power  to  regulate  the 
amount  of  deposit. 

Com.  vs.  Dunlap  17  Okla.  53,  87  Pac.  590. 

Bond  signed  by  individuals  treated  as  common  law  bond  and  defense 
of  ultra  vires  not  available. 

Ewing  vs.  Board  of  Com.  13  Okla.  250,  156  Pac.  229. 

Yeargm  vs.  Board  of  Com.  90  Okla.  38,  215  Pac.  619. 

Deposit  of  County  Funds  under  this  law  was  not  entitled  to  participate 
in  assets  of  insolvent  bank  or  the  guaranty  Fund  prior  to  repeal 
thereof. 

Lovett  vs.  Lankford  47  Okla.  12,  145  Pac.  767. 

In  re  Dennis  89  Okla.  255,  214  Pac.  1074. 

Bond  conforming  to  this  section  will  be  upheld  and  other  provisions 
treated  as  surplus. 

Ins.  Co.  vs.  Muskogee  Co.,  60  Okla.  140,  156  Pac.  655. 

Yeargin  vs.  Board  of  Com.  90  Okla.  38,  215  Pac.  619. 

Deposit  of  Funds  in  compliance  with  this  section  relieves  the  County 
Treasurer  of  liability. 

State  ex  rel  vs.  McCloud  64  Okla.  125,  166  Pac.  1065. 

If  deposit  by  County  Treaurer  exceeds  the  amount  of  Bond  or  securi¬ 
ties  pledged  County  Treasurer  is  liable  on  his  bond. 

State  ex  rel  vs.  McCloud  64  Okla.  126,  166  Pac.  1065. 

State  ex  rel  vs.  McCloud  (supra). 

Hinton  vs.  State  ex  rel.  57  Okla.  777,  156  Pac.  161. 

County  Treasurer  is  prohibited  from  receiving  any  profit  personally 
from  interest  earned  by  a  deposit  of  county  Funds,  and  county  may 
recover  same. 

West  vs.  Board  of  Com.  59  Okla.  169,  158  Pac.  354. 

42.  Treasurer’s  Bondsmen  Liable  for  Securities.  The  bonds¬ 
men  of  said  county  treasurer  shall  be  liable  to  the  bank  deposit¬ 
ing  any  of  the  securities  as  above  named  for  the  accounting  of  all 
such  securities  and  the  return  to  said  bank  of  any  or  all  of  the 
securities  as  above  named,  or  their  value  in  money.  Before  any 
of  the  securities  above  named  shall  be  accepted  by  the  county 
treasurer  in  behalf  of  the  county  commissioners,  said  securities 
shall  be  approved  to  the  satisfaction  of  a  majority  of  a  commission 
composed  of  the  county  judge,  county  attorney  and  county  clerk. 

History.  Sec.  5728  C.  O.  S.  1921;  R.  L.  1541;  S.  L.  1905,  p.  182. 

43.  Deposits  by  Guardian  Unlawful.  It  shall  be  unlawful  for 
a  guardian  of  a  minor  or  incompetent  to  deposit  money  belonging  to 
his  ward  in  any  bank  in  which  the  guardian  is  financially  inter¬ 
ested  or  is  employed,  and  any  guardian  who  shall  in  the  future  de¬ 
posit  money  belonging  to  his  ward  in  any  bank  in  which  he  is  fi¬ 
nancially  interested  shall  be  removed  from  office  by  the  county 
judge  having  jurisdiction  and  some  qualified  person  shall  be  ap¬ 
pointed  guardian  in  his  stead ;  provided,  however,  the  provisions  of 
this  act  shall  not  apply  to  any  person  who  is  guardian  of  any 
estate  where  the  value  of  the  personal  property  does  not  exceed 
seventy-five  hundred  dollars  ($7,500.00),  and  shall  not  prohibit 


County  Depositors 


31 


any  person  from  acting  as  guardian  of  his  own  children,  without 
regard  to  the  size  of  the  estate. 

History.  Sec.  1465  C.  O.  S.  1921;  S.  L.  1919,  p.  404,  Sec.  2. 

This  section  does  not  apply  to  trust  companies.  C.  56  Sess.  L.  1925, 
Sec.  3,  Pac.  4. 

44.  False  Advertising — Misuse  of  Term  “Bank”.  It  shall  be 
unlawful  for  any  individual,  firm,  or  association,  or  corporation  to 
receive  money  upon  deposit  or  transact  a  banking  business  except 
as  authorized  by  the  laws  of  the  State  of  Oklahoma,  or  of  the 
United  States,  or  to  use  or  advertise,  in  connection  with  any  busi¬ 
ness  other  than  the  banking  business,  conducted  under  the  bank¬ 
ing  laws  of  this  State,  the  words :  Banker,  bankers,  investment 
banker,  or  any  other  word  or  term  calculated  to  deceive  the  public 
into  belief  that  such  person,  firm,  association  or  corporation,  is 
engaged  in  the  banking  business.  Any  person,  firm,  association 
or  corporation  violating  any  of  the  provisions  of  this  section,  either 
individually  or  as  an  interested  party,  in  any  firm,  association  or 
corporation  shall  be  guilty  of  a  misdemeanor,  and  upon  conviction 
thereof,  shall  be  fined  in  a  sum  not  less  than  three  hundred  dollars 
($300.00)  nor  more  than  one  thousand  ($1,000.00)  dollars,  or  by 
imprisonment  in  the  county  jail  not  less  than  thirty  days  nor  more 
than  one  year,  or  by  both  such  fine  and  imprisonment,  and  it  is  here¬ 
by  made  the  duty  of  the  attorney  general  to  enforce  the  provisions 
of  this  section ;  and  in  order  to  further  prevent  the  violation  of  the 
section,  any  court  of  competent  jurisdiction  in  this  state  is  hereby 
authorized  and  empowered  to  grant  an  injunction  and  to  appoint 
a  receiver  to  take  charge  of  the  business  and  assets  of  any  per¬ 
son,  firm,  association  or  corporation  found  guilty  of  violating  the 
provisions  of  this  section,  and  to  make  all  necessary  and  proper 
orders  to  wind  up  such  business  and  prevent  a  violation  of  this 
section. 

History.  Sec.  4129  C.  O.  S.  1921;  S.  L.  1915,  p.  98,  Sec.  2,  amending-  R. 
L.  272. 

Lankford  vs.  Menefee  45  Okla.  228,  145  Pac.  375. 

The  privilege  of  engaging  in  banking  business  is  conferred  only  on  bank¬ 
ing  corporations. 

Levy  vs.  Reed  69  Okla.  180,  170  Pac.  497. 

45.  Banks — May  Invest  in  Bonds. 

Section  6.  Any  bank,  trust,  or  insurance  company,  organized 
under  the  laws  of  this  state,  may  invest  its  capital  and  surplus  in 
bonds  issued  under  the  provisions  of  this  act.  The  officers  having 
charge  of  any  sinking  fund  of  the  state,  or  of  any  county,  city, 
town,  township  or  school  district  thereof,  may  invest  the  sinking 
fund  of  the  state  or  of  such  county,  town,  township,  or  school  dis¬ 
trict  in  bonds  issued  under  the  provisions  of  this  act;  said 
bonds  shall  also  be  approved  collateral  as  security  for 
the  deposit  of  any  public  funds  and  for  the  investment 


Mothersead,  Bank  Comm.,  v. 


32 


of  trust  funds.  Said  bonds  shall  be  non-taxable  for  any 
purpose.  The  Board  of  Regents  of  the  University  of  Oklahoma  and 
the  Board  of  Agriculture  of  the  State  of  Oklahoma  are  required 
and  directed  to  carry  fire  and  tornado  insurance  on  the  said  dorm¬ 
itories  erected  under  the  provisions  of  this  act,  and  in  case  of  dam¬ 
age  to  said  buildings  or  loss  thereof,  the  said  insurance  money  is 
to  be  used  by  said  board  of  regents  of  said  institutions  to  repair 
said  buildings  so  damaged,  or  to  rebuild  same  in  case  of  total  loss 
of  any  or  all  of  them. 

History.  Sec.  6,  C.  87,  S.  L.  1924. 

46.  Banks — State  Treasurer — Deposits — Student  Loans. 

Section  1.  Upon  application  from  any  bank  approved  as  a 
depository  of  public  funds  of  the  state,  as  provided  in  Chapter  78, 
Article  3,  Compiled  Oklahoma  Statutes,  1921,  the  state  treasurer 
is  hereby  authorized  and  directed  to  make  a  deposit  with  said 
bank,  the  terms  and  conditions  of  which  shall  be  as  follows: 

First:  That  the  money  thus  deposited  shall  be  loaned  to  stu¬ 
dents  who  are  graduates  of  a  high  school  or  other  secondary  school 
of  Oklahoma,  and  who  are  attending  some  institution  of  higher 
learning  within  this  state,  with  which  to  pay  actual  and  necessary 
expenses  incident  to  college  or  university  attendance. 

Second:  That  the  amount  thus  loaned  shall  not  exceed  for 
any  one  pupil  in  any  one  year,  three  hundred  ($300.00)  dollars. 

Third:  That  the  interest  charged  shall  not  exceed  six  (6%) 
per  cent  per  annum. 

Fourth :  That  the  notes  or  renewals  thereof  securing  the  pay¬ 
ment  shall  mature  substantially  as  follows : 

(a)  For  a  one  year  course,  one  year  from  date  of  complet- 
tion  of  the  course. 

(b)  For  a  two  year  course,  of  consecutive  years,  equal 
amounts  in  one  and  two  years,  from  date  of  completion  of  the 
course. 

(c)  For  a  three  year  course,  of  constructive  years,  equal 
amounts  in  one  and  two  years  from  date  of  completion  of  the 
course. 

(d)  For  a  four  year  course,  of  consecutive  years,  equal 
amounts  in  one,  two  and  three  years  from  date  of  completion  of  the 
course. 

Fifth.  That  there  shall  accompany  the  application  of  the 
bank,  as  provided  above  in  this  section : 

(a)  A  certificate  from  the  principal  or  superintendent  of  the 
high  school,  or  other  secondary  school,  in  which  the  applicant  com- 


County  Depositors 


33 


pleted  the  course  required  for  college  entrance,  to  the  effect  that  the 
applicant  was  faithful  in  the  discharge  of  his  duties  as  a  pupil  and 
that  his  record  is  such  as  would  warrant  the  presumption  that  he 
should  be  able  to  successfully  prosecute  a  course  of  study  and 
training  in  an  institution  of  higher  learning;  that  the  applicant’s 
record  for  conduct  is  honorable  in  all  things ;  that  the  applicant ’s 
financial  condition  or  the  financial  conition  of  those  upon  whom 
he  is  dependent  is  such  as  to  make  it  impossible  or  difficult  for 
him  to  secure  the  advantages  offered  by  our  institution  of  higher 
learning,  without  such  financial  assistance. 

(b)  After  one  year’s  attendance  at  any  institution  of  higher 
learning  there  shall  accompany  the  application  of  the  bank  for 
each  succeeding  year  a  certificate  from  the  president  of  the  insti¬ 
tution  of  higher  learning  where  the  applicant  has  been  in  attend¬ 
ance  not  less  than  one  year,  to  the  effect  that  his  record  for  schol¬ 
arship,  conduct,  industry  and  general  attitude  toward  the  insti¬ 
tution  is  such  as  would  warrant  the  continuance  of  such  financial 
assistance. 

History.  C.  84,  S.  L.  1923. 

47.  Banker’s  Lien.  A  banker  has  a  general  lien,  dependent 
on  possession,  upon  all  property  in  his  hands  belonging  to  a  cus¬ 
tomer,  for  the  balance  due  to  him  from  such,  customer  in  the  course 
of  the  business. 

History.  Sec.  7434  C.  O.  S.  1921;  R.  L.  3854;  Dak.  4443.  S.  L.  1890,  Sec. 
3324. 

Bank  may  apply  funds  or  deposit  of  a  customer  to  any  past  due  debt. 

Gillette  vs.  Bank  95  Okla.  77,  218  Pac.  1058. 

Where  deposit  was  made  by  third  person  to  credit  of  second  person  with¬ 
out  authority  of  which  bank  had  no  notice,  held  relation  of  debtor  and 
creditor  did  not  exist  between  bank  and  second  party  and  bank  had 
no  right  to  off  set  same  against  debt  of  third  party. 

Gillette  ts.  Bank  (supra). 

A  banker  is  liable  for  conversion  if  he  neglects  to  sell  a  customers  prop¬ 
erty  on  which  he  has  a  lien,  within  a  reasonable  time. 

Bank  vs.  Beeson  104  Okla.  293,  231  Pac.  845. 

Prior  lien  of  banker  is  not  affected  by  a  subsequent  garnishment. 

Bank  vs.  Bennett  (Okla.)  243.  Pac.  135. 

FEDERAL  RESERVE 

48.  The  words  “federal  reserve  act”  herein  used  shall  be 
held  to  mean  and  to  include  the  act  of  congress  of  the  United 
States  approved  December  23.  1913,  as  heretofore  and  hereafter 
amended. 

The  words  “federal  reserve  board”,  shall  be  held  to  mean  the 
federal  reserve  board  created  and  described  in  the  federal  reserve 

act. 


34 


Mothersead,  Bank  Commv  v. 

The  words  “federal  reserve  bank”,  shall  be  held  to  mean  the 
federal  reserve  banks  created  and  organized  under  authority  of  the 
federal  reserve  act. 

The  words  “member  bank”,  shall  be  held  to  mean  any  national 
bank,  state  bank  or  banking  and  trust  company  which  has  become 
or  which  becomes  a  member  of  one  of  the  federal  reserve  banks 
created  by  the  federal  reserve  act. 

History.  Sec.  4155  C.  O.  S.  1921;  S.  L.  1921,  p.  143. 

49.  Banks — Authority  to  Become  Member  of  Federal  Reserve 
Bank.  That  any  bank  or  trust  company  incorporated  under  the  laws 
of  this  State  shall  have  the  power  to  subscribe  to  the  capital  stock 
and  become  a  member  of  a  federal  reserve  bank. 

History.  Sec.  4156,  C.  O.  S.  21,  L.  1921,  p.  143. 

51.  Same — Authority  Vested  in  Banks: 

Any  bank  or  trust  company  incorporated  under  the  laws  of 
the  State  of  Oklahoma  which  is,  or  which  becomes  a  member  of  a 
federal  reserve  bank,  is  by  this  act  vested  with  all  powers 
conferred  upon  member  banks  of  the  federal  reserve  banks 
by  the  terms  of  the  federal  reserve  act  as  fully  and  completely  as 
if  such  powers  were  specifically  enumerated  and  described 
herein,  and  all  such  powers  shall  be  exercised  subject  to  all  re¬ 
strictions  and  limitations  imposed  by  the  federal  reserve  act,  or  by 
regulations  of  the  federal  reserve  board  made  pursuant  thereto: 
Provided,  however,  that  this  section  shall  not  limit  the  duties  and 
powers  of  the  bank  commissioner  and  the  banking  board  to  super¬ 
vise,  regulate,  administer  and  control  all  state  banks  and  trust 
companies  nor  limit  the  power  of  the  bank  commissioner  to  declare 
such  bank  or  trust  company  to  be  an  insolvent  institution,  and  to 
take  charge  thereof  for  the  purpose  of  winding  up  its  affairs  as 
now  or  may  hereafter  be  provied  by  law. 

History.  Sec.  4157  C.  O.  S.  1921,  L.  1921,  p.  143. 

Federal  Reserve  Banks — Requirements — Compliance  with: 

A  compliance  on  the  part  of  any  such  bank  or  trust  company 
with  the  reserve  requirements  of  the  federal  reserve  act  shall  be 
held  to  be  a  full  compliance  with  those  provisions  of  the  laws  of  this 
State  which  require  banks  or  trust  companies  to  carry  or  main¬ 
tain  reserve  other  than  such  as  is  required  under  the  terms  of  the 
federal  reserve  act. 

History.  Sec.  4158  C.  O.  S.  1921;  L.  1921,  p.  143. 

52.  Examination — Copies  of  Examination: 

Any  such  bank  or  trust  company  shall  be  subject  to  the  exam¬ 
inations  required  under  the  terms  of  the  federal  reserve  act,  and 
the  authorities  of  this  State  having  supervision  over  such  Bank, 
may  in  their  discretion  accept  such  examination  in  lieu  of  the  ex¬ 
amination  required  under  the  laws  of  this  State.  Such  authorities, 


County  Depositors 


35 


their  agents  and  employees,  may  furnish  to  the  federal  reserve 
board,  the  federal  reserve  banks,  or  to  examiners  duly  appointed 
by  the  federal  reserve  board,  or  the  federal  reserve  banks,  copies 
of  all  examinations  made,  and  may  disclose  to  such  federal  re¬ 
serve  board,  federal  reserve  banks,  or  examiner,  any  information 
with  reference  to  the  condition  of  affairs  of  state  banks  or  trust 
companies  organize  under  the  laws  of  this  State  which  become 
members  of  a  federal  reserve  bank,  or  which  apply  for  membership 
in  a  federal  reserve  bank. 

History.  Sec.  4159  C.  O.  S.  21,  L.  1921,  p.  143. 

53.  Banks — Borrowing  and  Discounting — Not  Limited: 

Any  bank  or  trust  company  incorporated  under  the  laws  of 
this  State  which  is  or  which  becomes  a  member  of  the  federal  re¬ 
serve  bank,  shall  not  be  limited  in  its  borrowing  or  rediscounting 
with  the  federal  reserve  bank  of  which  it  is  a  member. 

History.  C.  O.  S.  '21,  Sec.  4160. 

BANKING  BOARD 

54.  Banking  Board — Compensation : 

Section  6.  That  Section  4161  of  Compiled  Oklahoma  Stat¬ 
utes  annotated,  1921,  be  and  the  same  is  hereby  amended  to  read 
as  follows: 

“Section  4161.  That  the  banking  board  shall  be  composed  of 
the  bank  commissioner  and  three  other  persons,  which  persons 
shall  be  appointed  by  the  Governor  by  and  with  the  advice  and  con¬ 
sent  of  the  Senate,  no  one  of  whom  shall  be  an  officer  or  director 
of  a  national  bank.  Said  three  members  shall  hold  office  concur¬ 
rently  with  the  Governor,  and  as  soon  as  said  members  are  ap¬ 
pointed  under  the  provisions  of  this  act,  the  board  shall  select 
one  of  said  members  as  treasurer.  The  members  of  the  board, 
other  than  the  bank  commissioner  shall  receive  Fifteen  ($15.00) 
Dollars  each  per  day  for  attendance  upon  said  board,  and  they  shall 
be  paid  their  actual  and  necessary  expenses  incurred  in  perform¬ 
ance  of  their  duties,  the  same  to  be  paid  out  of  the  general  reve¬ 
nue  fund.  The  bank  commissioner  shall  be  the  chairman  of  said 
board.  Said  board  in  conjunction  with  the  bank  commissioner 
shall  have  supervision  and  control  of  the  issuing  of  bank  charters 
and  the  administration  of  the  banking  laws  of  the  state  not  in¬ 
consistent  with  other  specific  declarations,  provided  by  the  stat¬ 
utes.  If  a  vacancy  shall  at  any  time  occur  in  the  membership  of 
said  board,  the  Governor  shall  fill  the  same  by  appointment  as 
herein  provided. 

History.  Sec.  6,  C.  137,  S.  L.  1923;  amending-  Sec.  4161  C.  O.  S.  1921. 

Under  former  law  suit  ag-ainst  Bank  Commissioner  and  Banking  Board 

was  suit  against  State. 

Board  vs.  Trust  Co.  49  Okla.  72,  151  Pac.  566. 

Lovett  vs.  Lankford  47  Okla.  12,  145  Pac.  767. 


36 


Motherskad,  Bank  Commv  v. 

Lankford  vs.  Schroeder  47  Okla.  279,  147  Pac.  1049. 

Lankford  vs.  Platte  Iron  Works  235  U.  S.  461,  S.  C.  173,  596  Ed.  316. 
Immunity  of  Board  from  suit  is  not  waived  by  unauthorized  agreed 
statement  of  facts. 

Surety  Co.  vs.  Board  49  Okla.  184,  152  Pac.  389. 

55.  Banking  Board — Selection  —  Executive  Council  —  Fees. 

The  directors  of  each  state  bank  shall  have  the  authority  to  select 
a  person  to  represent  it  in  making  recommendations  to  the  Gov¬ 
ernor  for  the  appointment  of  members  of  the  banking  board.  Said 
persons  selected  by  the  board  of  directors  of  each  of  such  state 
banks  shall  constitute  the  State  Bankers’  Association,  and  such 
association  shall  select  an  executive  council  of  not  less  than  nine, 
nor  more  than  fifteen  members,  who  shall  recommend  to  the  Gov¬ 
ernor  the  names  of  nine  persons  having  qualifications  in  this  act 
prescribed  for  members  of  the  banking  board,  from  which  to  se¬ 
lect  the  members  of  the  banking  board.  The  Governor  shall  ap¬ 
point  said  banking  board  from  the  names  so  submitted,  said  ex¬ 
ecutive  council  shall  have  authority  to  collect  annually  from  each 
and  every  corporation  engaged  in  the  banking  business  under  the 
laws  of  this  state  a  sum  of  money  not  exceeding  fifty  cents  (50) 
upon  each  one  thousand  dollars  ($1000.00)  of  the  capital  and  sur¬ 
plus  of  such  bank,  and  for  the  purpose  of  collecting  said  money  the 
said  executive  council  shall  have  authority  and  is  hereby  empowered 
to  make  such  rules  and  regulations  as  in  its  judgment  shall  be  ne¬ 
cessary,  and  such  assessment  or  assessments  shall  become  a  fixed 
indebtedness  againt  such  bank  or  banks,  and  may  be  collected  by 
suit  in  the  name  of  the  association. 

History.  Sec.  4171  C.  O.  S.  1921;  S.  L.  1915,  p.  99,  Sec.  3,  amending  S. 
L.  1913,  p.  26,  Sec.  3. 

Note:  This  act  authorizes1  the  Executive  Council  to  name  nine  bankers 
for  members  of  board  but  appears  to  be  inoperative  as  repugnant  to 
Sec.  6,  C.  137,  S.  L.  1923,  supra,  but  the  remainder  appears  to  be  in 

force.  The  Governor  is  probably  not  bound  to  follow  this  anyway. 

The  rest  of  the  act  appears  to  be  operative. 

56.  Removal  of  Members  of  Banking  Board.  The  bank  com¬ 
missioner  and  the  members  of  the  banking  board  shall  be  subject 
to  removal  by  the  Governor  for  cause ;  two-thirds  of  the  representa¬ 
tives  of  the  state  banks,  expressed  in  such  a  manner  as  they  may 
determine,  shall  have  the  authority  to  make  recommendations  to 
the  Governor  in  exercising  the  power  of  removal,  and  due  consid¬ 
eration  shall  be  given  by  the  Governor  to  the  recommendation  of 
the  majority  of  said  representatives  of  state  banks  in  ascertaining 
the  grounds  for  removal  of  the  Bank  Commissioner  and  the  mem¬ 
bers  of  the  banking  board. 

History.  Sec.  4172  C.  O.  S.  1921:  S.  L.  1913,  p.  26,  Sec.  5. 

This  section  contemplates  an  investigation  by  the  Governor  before  re¬ 
moving  for  cause,  but  courts  will  not  interfere  with  the  exercise  of 
this  executive  discretion. 


County  Depositors 


37 


Bynum  vs.  Strain,  95  Okla.  45,  218  Pac.  888. 

57.  Charter — Issuance. 

Section  8.  That  Section  4174  of  Compiled  Oklahoma  Statutes 
annotated,  1921,  be  and  the  same  is  hereby  amended  to  read  as 
follows : 

“Section  4174.  From  and  after  the  passage  of  this  act  no 
charter  or  authority  to  engage  in  the  banking  business  in  this 
state  shall  be  issued  and  no  bank  be  permitted  to  engage  in  busi¬ 
ness  except  on  certificate  issued  by  the  bank  commissioner  upon 
approval  of  the  banking  board.  The  issuance  of  such  certificate 
shall  rest  solely  in  the  discretion  of  the  Bank  Commissioner  and 
the  Banking  Board.  Such  banks  organized  subsequent  to  the  en¬ 
actment  of  this  act  shall  deposit  the  sum  of  $100.00  in  cash  with 
the  bank  commissioner  to  guarantee  the  payment  of  any  necessary 
expenses  of  examination  of  such  bank  prior  to  its  opening  for 
business. 

History.  Sec.  8,  C.  137,  S.  L.  1923;  amending-  Sec.  4174,  C.  O.  S.  1921; 

S.  Li.  1913,  p.  30. 

Under  old  law  Commissioner  had  no  discretion. 

Smock  vs.  Bank,  22  Okla.  825,  98  Pac.  945. 

58.  Examination  of  Banks — Corruption  in  Office.  The  bank¬ 
ing  board  shall  cause  one  of  the  examiners  to  visit  each  bank,  do¬ 
ing  business  under  the  provisions  of  this  act,  at  least  twice  each 
year,  an  oftener  if  the  commissioner  deems  it  necessary.  Upon 
such  examination  the  examiner  shall  make  a  careful,  thorough  and 
complete  examination  into  the  condition  and  affairs  of  such  bank, 
and  for  such  purposes  each  examiner  is  hereby  empowered  to  ad¬ 
minister  oaths  and  to  examine  under  oath  any  officer,  director, 
employee,  agent,  clerk,  stockholder,  depositor,  or  borrower  of  such 
bank.  They  shall  make  complete  detailed  reports  of  all  their 
examinations  and  findings,  and  shall  make  such  recommendations 
to  the  commissioner  as  in  their  judgment  may  be  necessary  for  the 
better  management,  or  to  better  the  condition,  of  any  bank  ex¬ 
amined  by  them.  Such  reports  shall  be  transmitted  to  the  com¬ 
missioner  as  soon  as  made  up,  and  shall  be  kept  on  file  in  the 
commissioner’s  office.  Any  commissioner,  assistant  commissioner, 
secretary,  examiner  or  employee  of  the  banking  department,  who 
shall  be  guilty  of  any  corruption  or  misconduct  in  office,  or  who 
shall  accept  any  gratuity,  reward  or  present  from  any  bank  or 
bank  officer,  or  shall  take  or  accept  any  fee  or  compensation  from 
any  bank  or  banker  during  his  term  of  office,  shall  be  deemed 
guilty  of  corruption  in  office,  and,  upon  conviction,  shall  be  pun¬ 
ished  by  imprisonment  in  the  State  Penitentiary  for  a  term  of  not 
less  than  one,  nor  more  than  ten  years;  and  any  commissioner, 
secretary,  examiner  or  employee  of  the  bnaking  department,  who 
shall  neglect  to  perform  any  duty,  or  who  shall  prove  to  be  in- 


38  Moth erse ad,  P.axk  Comm.,  v. 

competent,  negligent,  or  insubordinate,  may  be  summarily  removed 
by  the  state  banking  board. 

History.  Sec.  4176  C.  O.  S.  1921;  S.  L.  1913,  p.  32,  Sec.  10. 

Admission  of  criticisms  of  bank  by  examiner  showing  condition  is  proper 
against  officer  for  receiving  deposit. 

Appleget  vs.  State  (Okla.)  243  Pac.  251. 

59.  Assignment  of  Shares  of  Stock — Restrictions.  Any  owner 
of  any  of  the  shares  of  the  capital  stock  of  any  banking  corpora¬ 
tion,  may  make  disposition  of  such  shares  by  written  assignment 
endorsed  upon  the  certificates  of  stock  and  by  delivery  of  the  same, 
but  no  such  assignment  shall  be  effectual  to  transfer  the  title  to 
such  shares  of  stock  until  the  same  are  transferred  upon  the  stock 
books  of  the  corporation.  Any  shareholder  who  shall  sell,  assign, 
or  in  any  manner  dispose  of  his  shares  of  stock,  shall,  in  the  event 
of  the  insolvency  of  such  corporation,  continue  to  be  liable  thereon 
jointly  with  the  owner  thereof,  to  the  extent  of  the  liability  of  such 
owner,  for  a  period  of  one  year  from  the  date  of  the  transfer  of  such 
shares  upon  the  books  of  such  corporation,  or  until  the  bank  has 
been  examined  and  the  sale  approved  by  the  Si  ate  Bank  Cjuimis- 
sioner. 

History.  Sec.  4177  C.  O.  S.  1921;  S.  L.  1913,  p.  33,  Sec.  11. 

Note:  (See  rules  of  Board). 

Where  stock  is  sold  but  not  transferred  on  books  one  year  prior  to  fail¬ 
ure  both  seller  and  purchaser  are  jointly  liable  for  the  double  liability. 
Board  vs.  State  ex  rel.  (Okla.)  242  Pac.  522. 

60.  Convicted  Persons  Barred  From  Banking  Business.  No 

person  who  has  been  convicted  for  the  violation  of  the  banking 
laws  of  this  or  any  other  state  shall  be  permitted  to  engage  in  or 
become  an  officer  or  official  in  any  bank  organized  in  this  state. 

History.  Sec.  4187  C.  O.  S.  1921;  S.  L.  1913,  p.  38,  Sec.  21. 

61.  Bank  Commissioner. 

Section  1.  Bank  Commissioner — Term — Power.  General  laws 
shall  be  enacted  by  the  legislature  providing  for  the  creation  of 
a  Banking  Department,  to  be  under  the  control  of  a  Bank  Com¬ 
missioner,  who  shall  be  appointed  by  the  Governor  for  a  term  of 
four  years,  by  and  with  the  consent  of  the  Senate,  with  sufficient 
power  and  authority  to  regulate  and  control  all  State  Banks,  Loan, 
Trust  and  Guaranty  Companies,  under  laws,  which  shall  provide 
for  the  protection  of  depositors  and  individual  stockholders. 
(Bunn’s  Ed.  Sec.  315). 

History.  Sec.  1,  Article  XIV,  Constitution  of  Oklahoma. 

This  provision  is  the  Key-stone  of  the  bank  laws  and  should  be  liber¬ 
ally  construed. 

State  ex  rel  vs.  Norman  86  Okla.  36,  206  Pac.  522. 

Kimbriel  vs.  State  ex  rel,  106  Okla.  177,  233  Pac.  422. 

The  Bank  laws  passed  under  this  provision  of  the  Constitution  apply  only 
to  banks  and  trust  companies  and  they  supersede  the  general  cor¬ 
porate  laws. 


County  Depositors 


39 


State  ex  rel  vs.  Norman  (supra). 

It  was  intention  of  guaranty  law  passed  under  this  provision  to  protect 
unsecured  depositors  first. 

State  ex  rel  vs.  Zale  (Okla.)  240  Pac.  1035. 

62.  Bank  Commissioner — Appointment. 

Section  1.  That  Section  4225,  Compiled  Oklahoma  Statutes, 
1921,  be,  and  the  same  is  hereby  amended  to  read  as  follows : 

“  Section  4225.  The  Governor  shall  appoint,  by  and  with  the 
advice  and  consent  of  the  Senate,  a  Bank  Commissioner,  who  has 
been  a  tax  payer  for  three  years  prior  to  appointment  and  who 
shall  hold  office  for  a  term  of  four  years,  and  until  his  successor 

is  appointed  and  qualified.” 

History.  Sec.  1,  C.  47,  S.  L.  1923-1924,  repealing  Sec.  1,  C.  220,  S.  L.  1923, 
and  amending  Sec.  4225  C.  O.  S.  1921;  R.  L.  333;  S.  L.  1907-8,  p.  143. 

63.  Assistant  Bank  Commissioner. 

Section  2.  There  is  hereby  created  the  office  of  the  Assistant 
Bank  Commissioner  and  Secretary  to  the  Banking  Board  who  shall 
be  appointed  by  the  Bank  Commissioner  subject  to  the  approval 
of  the  banking  board  who  shall  have  had  at  least  three  years  actual 
experience  in  the  banking  business  and  who  shall  be  Assistant  Bank 
Commissioner  and  Secretary  to  the  State  Banking  Board  and  who, 
in  case  of  absence  or  disability  of  the  Bank  Commissioner,  shall 
have  authority  to  perform  the  duties  imposed  by  law  upon  the 
Bank  Commissioner. 

The  Assistant  Bank  Commissioner  and  Secretary  to  the  Bank¬ 
ing  Board  shall  receive  a  salary  of  $3,600.00  per  annum,  and  travel¬ 
ing  expenses,  including  only  railroad  fare,  livery  hire,  telephone, 
telegraph  and  hotel  bills  while  on  business  connected  with  his 
department,  payable  monthly  out  of  the  General  Revenue  Fund 
of  the  State. 

History.  Sec.  2,  C.  220,  S.  L.  1923;  rep.  C.  O.  S.  4227. 

64.  Assistants  to  the  Bank  Commissioner. 

Section  3.  There  are  hereby  created  and  established  not  to 
exceed  fourteen  positions,  each  to  be  known  as  Assistant  to  the 
Bank  Commissioner,  all  but  two  of  them  shall  have  had  at  least 
three  years  ’  experience  in  actual  banking;  one  of  them  shall  have 
had  at  least  three  years’  experience  in  the  actual  handling  and  con¬ 
trol  of  Building  and  Loan  Associations  and  shall  be  designated  by 
the  Bank  Commissioner  as  the  Building  and  Loan  Auditor,  and 
be  a  duly  licensed  accountant. 

One  other  shall  have  had  at  least  three  years’  experience  as 
a  public  accountant,  Auditor  or  Bank  Examiner  and  shall  be  desig¬ 
nated  as  the  Auditor  for  the  Banking  Department. 

Two  of  said  assistants  shall  have  had  at  least  two  years’  ex¬ 
perience  either  as  a  State  or  National  Bank  Examiner  and  shall  be 
designated  as  special  assistants  or  field  supervisors  at  large. 


40  Mothersead,  Bank  Commv  v. 

All  such  positions  shall  be  filled  by  appointment  by  the  Bank 
Commissioner,  subject  to  the  approval  of  the  Banking  Board,  and 
the  incumbent  thereof  shall  hold  office  at  the  pleasure  of  the  Bank 
Commissioner  and  the  Banking  Board. 

The  salary  of  the  Assistant  designated  as  the  building  and  loan 
auditor  shall  be  $3,000.00  per  annum  and  traveling  expenses,  in¬ 
cluding  railroad  fare,  livery  hire,  telephone,  and  telegraph  and  hotel 
bills  while  on  business  connected  with  his  department  payable 
monthly  out  of  the,  general  revenue  fund  of  the  State. 

The  salary  of  each  of  the  two  assistants  to  the  Bank  Commis¬ 
sioner  designated  as  special  assistants  or  supervisors  at  large  shall 
be  $3,600.00  per  annum  and  traveling  expenses  including  only  rail¬ 
road  fare,  livery  hire,  telephone,  telegraph  and  hotel  bills  while  on 
business  connected  with  their  departments  payable  monthly  out 
of  the  general  revenue  fund  of  the  State. 

The  salary  of  each  of  the  other  Assitants  to  the  Bank  Com¬ 
missioner  shall  be  $2,400.00  per  annum  for  the  first  year’s  service, 
$2,600.00  per  annum  for  the  second  year’s  service,  $2,800.00  per 
annum  for  the  third  year’s  service  and  $3,000.00  per  annum  for 
the  fourth  year’s  service,  and  traveling  expenses  including  only 
railroad  fare,  livery  hire,  telephone,  telegraph  and  hotel  bills  while 
on  business  of  the  department,  payable  monthly  out  of  the  General 
Revenue  Fund  of  the  State. 

Provided,  no  person  shall  hold  the  position  of  the  Assistant  to 
the  Bank  Commissioner,  who  after  his  appointment  shall  be  in¬ 
terested,  directly  or  indirectly,  in  any  Bank  or  Building  and  Loan 
Association,  nor  shall  any  person  become  interested,  directly  or  in¬ 
directly  in  any  Bank,  or  Building  and  Loan  Association,  while  hold¬ 
ing  such  position. 

Provided,  that  any  person  receiving  the  appointment  of  As¬ 
sistant  to  the  Bank  Commissioner  who  shall  have  had  two  years’ 
previous  experience  either  as  a  State  or  National  Bank  Examiner 
in  Oklahoma,  shall  be  entitled  to  receive  the  maximum  compensa¬ 
tion  herein  provided  of  $3,000.00  per  annum  on  and  after  the  date 
of  the  approval  of  his  appointment  as  such  Assistant  to  the  Bank 
Commissioner. 

History.  Sec.  3,  C.  220,  S.  L.  1923;  rep.  C  .O.  S.  Sec.  4227,  4228. 

The  office  of  Building  and  Loan  Auditor  was  not  repealed  by  Sess.  L. 

1925,  p.  31. 

66.  Bonds  and  Oaths  of  Office. 

Section  9.  The  Bank  Commissioner  shall  before  entering  upon 
the  discharge*  of  his  duties  take  and  subscribe  to  the  usual  oath  of 
office  and  shall  execute  to  the  State  of  Oklahoma  a  bond  in  the 
sum  of  $25,000.00  with  sufficient  surety  for  the  faithful  perform¬ 
ance  of  his  duty. 


Attorneys 


41 


And,  the  Assistant  Bank  Commissioner  and  Secretary  to  the 
Banking  Board  shall  before  entering  upon  the  discharge  of  his 
duties  take  and  subscribe  to  the  usual  oath  of  office  and  shall  exe¬ 
cute  to  the  State  of  Oklahoma  a  bond  in  the  sum  of  $25,000.00  each 
with  sufficient  surety  for  the  faithful  performance  of  his  duty. 

Each  of  said  Assistants  to  the  Bank  Commissioner  and  the 
Attorney  for  the  Banking  Department  shall,  before  entering  upon 
the  discharge  of  their  duties  take  and  subscribe  to  the  usual  oath 
of  office  and  shall  execute  to  the  State  of  Oklahoma  a  bond  in  the 
sum  of  $10,000.00  each  with  sufficient  surety  for  the  faithful  per¬ 
formance  of  their  duty;  said  bonds  shall  be  approved  and  filed 
as  provided  by  law. 

History.  Sec.  9.  C.  220,  S.  L.  1923;  rep.  Sec.  4226  C.  O.  S.  and  Sec.  4227 
C.  O.  S.  1921. 

67.  State  Bank  Commissioner — Salary. 

Section  1.  The  salary  of  the  State  Bank  Commissioner  is  here¬ 
by  fixed  at  Five  Thousand  ($5,000.00)  Dollars,  per  annum,  and 
traveling  expenses,  including  only  railroad  fare,  livery  hire,  tele¬ 
phone,  telegraph  and  hotel  bills,  while  on  business  connected  with 
his  Department,  payable  monthly,  out  of  the  general  revenue  fund 
of  the  State. 

History.  Sec.  1,  C.  81,  S.  L.  1924. 

ATTORNEYS 

68.  Same — Office  of  Attorney — Salary. 

Section  2.  Section  4,  Chapter  220,  of  the  Session  Laws  of  Ok¬ 
lahoma,  1923,  is  hereby  amended  to  read  as  follows : 

“Section  4.  There  is  hereby  created  the  office  of  attorney; 
and  the  office  of  assistant  attorney  for  the  period  of  one  (1)  year, 
from  the  passage  of  this  Act,  for  the  State  Banking  De¬ 
partment,  who  shall  be  appointed  by  the  Banking  Commissioner, 
subject  to  the  approval  of  the  Banking  Board,  who  shall  each  have 
had  at  least  five  (5)  years’  actual  experience  in  the  practice  of 
law  in  the  State  of  Oklahoma.  The  Attorney  for  the  Banking  De¬ 
partment  shall  receive  a  salary  of  $5,000.00  per  annum,  and  the 
assistant  attorney  for  the  Banking  Department  shall  receive  a  salary 
of  $4,000.00  per  annum,  and  each  shall  be  paid  his  traveling  ex¬ 
penses,  including  only  railroad  fare,  livery  hire,  telephone,  tele¬ 
graph  and  hotel  bills  while  on  business  of  the  Department,  payable 
monthly,  out  of  the  General  Revenue  Fund  of  the  State;  provided, 
that  the  attorney  and  the  assistant  attorney  for  the  Banking  De¬ 
partment  shall  not  engage  in  the  practice  of  law  during  their 
tenure  of  office,  except  following  their  duties  as  attorney  for  the 
Banking  Department,  and  a  violation  of  this  provision  shall  be 
grounds  for  disbarment.” 

History.  Sec.  2,  C.  81,  S.  L .  1924;  rep.  Sec.  4,  C.  220,  S.  H.  1923. 


42 


Moth erse ad,  Bank  Commv  v. 

Note:  One  year  limitation:  The  position  of  assistant  attorney  expired 
in  one  year.  The  position  of  additional  attorney  created  by  C.  50, 
L.  1925,  to  expire  June  30,  1927. 

69.  Same — Powers  and  Duties. 

Section  5.  Said  attorney,  as  provided  under  this  section,  shall 
have  and  possess  the  same  powers  and  authority  of  County  At¬ 
torney  in  criminal  prosecutions,  for  any  violations  of  the  Banking 
Laws  of  this  State,  and  may  file  complaints  and  informations,  and 
appear  before  Grand  Juries,  and  secure  indictmentts  against  all 
persons  for  the  violation  of  any  of  the  criminal  laws  of  this  State, 
in  connection  or  growing  out  of  the  operation  or  liquidation  of  any 
bank  or  trust  company  operating  under  the  laws  of  this  State. 

Also,  in  civil  cases  in  the  collection  of  any  assets  both  personal 
and  real  now  in  the  hands  of  thq  Bank  Commissioner  or  may  here¬ 
after  come  into  his  possession  by  virtue  of  his  office  on  which  the 
State  has  a  lien,  and  perform  such  other  legal  services  for  the 
Banking  Department  as  he  may  be  directed  by  the  Bank  Commis¬ 
sioner  and  the  Banking  Board. 

History.  Sec.  7,  C.  220,  S.  L.  1923. 

70.  Chief  Clerk — Salary. 

Section  6.  There  is  hereby  created  and  established  the  po¬ 
sition  of  Chief  Clerk  of  the  Banking  Department,  who  shall  be 
appointed  by  the  Bank  Commissioner,  subject  to  the  approval  of 
the  Banking  Board  who  shall  have  had  at  least  three  years’  ex¬ 
perience  in  bookkeeping  and  accounting.  The  salary  of  the  Chief 
Clerk  shall  be  $2400.00  per  annum  payable  monthly  out  of  the  Gen¬ 
eral  Revenue  Fund  of  the  State. 

History.  Sec.  6,  C.  220  S.  L.  1923. 

71.  Bonding  Clerk. 

Section  7.  There  is  hereby  created  the  position  of  Bonding 
Clerk  for  the  Banking  Department  who  shall  be  appointed  by  the 
Bank  Commissioner  subject  to  the  approval  of  the  Banking  Board 
who  shall  have  had  at  least  three  years’  office  experience.  The 
Bonding  Clerk  for  the  Banking  Department  shall  receive  a  salary 
of  $1800.00  per  annum,  payable  monthly  out  of  the  General  Reserve 
Fund  of  the  State. 

History.  Sec.  7,  C.  220,  S.  L.  1923. 

72.  Stenographers — Salary. 

Section  8.  There  is  hereby  created  and  established  three  po¬ 
sitions,  each  to  be  known  as  stenographers  for  the  Banking  Depart¬ 
ment,  all  of  whom  shall  have  had  at  least  three  years’  actual  ste¬ 
nographic  experience. 

Said  stenographers  for  the  Banking  Department  shall  each 
receive  a  salary  of  $1500.00  per  annum,  payable  monthly  out  of 
the  General  Revenue  Fund  of  the  State. 


Attorneys 


43 


History.  Sec.  8,  C.  220,  S.  L.  1923. 

73.  Additional  Attorney :  Law  Clerk  and  Stenographer. 

Section  1.  In  addition  to  the  office  of  Attorney,  now  created 
in  the  Banking  Department,  there  is  hereby  created  the  office  of 
another  Attorney  for  the  Banking  Department,  who  shall  be  ap¬ 
pointed  by  the  Bank  Commissioner,  subject  to  the  approval  of  the 
Banking  Board,  and  who  shall  have  had  at  least  five  (5)  years’ 
actual  experience  in  the  practice  of  law  in  this  State.  Such  at¬ 
torney  shall  receive  a  salary  of  four  thousand  ($4,000.00)  dollars 
per  annum,  and  shall  be  paid  traveling  expenses,  including  rail¬ 
road  fare,  livery  hire,  telephone,  telegraph  and  hotel  bills,  while 
on  business  for  the  Department,  payable  monthly  out  of  the  gen¬ 
eral  revenue  funds  of  the  State.  Such  additional  attorney  shall 
not  engage  in  the  practice  of  law  during  his  tenure  of  office,  ex¬ 
cept  in  the  performance  of  his  duties  as  Attorney  for  the  Bank¬ 
ing  Department,  and  a  violation  of  this  provision  shall  be  grounds 
for  disbarment. 

Section  2.  There  is  hereby  created  the  office  of  Law  Clerk 
in  the  Banking  Department  and  such  clerk  shall  be  a  licensed,  ad¬ 
mitted  and  practicing  attorney  in  the  State  of  Oklahoma,  who 
shall  receive  a  salary  of  Two  Thousand  Four  Hundred  ($2,400.00) 
Dollars,  per  annum,  payable  monthly  out  of  the  general  revenue 
funds  of  the  State,  and  who  shall  be  paid  his  traveling  expenses, 

History.  S.  B.  210,  S.  L.  1925,  approved  March  25,  1925. 

Note:  Position  of  assistant  attorney  expired  March  17,  1925,  and  this 

creates  another  attorney. 

74.  Banks  to  be  Examined  Twice  Each  Year.  It  shall  be  the 
duty  of  the  bank  commissioner,  or  one  of  his  assistants,  to  visit 
every  bank  or  trust  company  subject  to  the  provisions  of  this  chap¬ 
ter  at  least  twice  each  year,  and  oftener  if  he  deem  it  advisable,  for 
the  purpose  of  making  a  full  and  careful  examination  and  inquiry 
into  the  condition  of  the  affairs  of  such  bank  or  trust  company 
and  for  that  purpose  the  bank  commissioner  and  his  assistants  are 
hereby  authorize  and  empowered  to  administer  oaths  and  to  ex¬ 
amine  under  oath  the  stockholders  and  directors  and  all  officers 
and  employees  and  agents  of  such  banks  or  other  persons.  The 
commissioner  shall  reduce  the  result  thereof  to  writing,  which  shall 
contain  a  full,  true  and  careful  statement  of  the  condition  of  such 
bank  or  trust  company,  and  file  and  retain  the  same  in  his  office. 

History.  Sec.  4229  C.  O.  S.  1921;  R.  L.  337;  S.  L.  1907-8,  p.  144. 

75.  Fees  for  Examination. 

Section  10.  The  Bank  Commissioner  shall  charge  and  collect 
for  each  examination  of  banks  under  his  supervision  the  following 
fees : 


(a)  From  banks  having  a  capital  stock  of  less  than  $25,000.00, 
a  fee  of  $20.00. 


44 


Mothersead,  Bank  Commv  v. 


(b)  From  banks  having  a  capital  stock  of  $25,000.00  and 
less  than  $50,000.00,  a  fee  of  $27.50. 

(c)  From  banks  having  a. capital  stock  of  $50,000.00  and  less 
than  $100,000.00,  a  fee  of  $32.50. 

(b)  From  banks  having  a  capital  stock  of  $100,000.00,  a  fee 
of  $35.00. 

(e)  From  banks  having  a  capital  stock  of  more  than  $200,000.- 
00,  a  fee  of  $37.50. 

(f)  On  each  $1000.00  of  resources,  or  major  fraction  thereof, 
at  date  of  examination,  2  cents. 

The  latter  fee  shall  be  in  addition  to  the  charges  made  on  the 
basis  of  capital  stock,  and  all  of  said  fees  shall  be  paid  into  the 
State  Treasury  and  accrue  to  the  General  Revenue  Fund  of  the 
State. 

History.  Sec.  10,  C.  220,  S  .L.  1923. 

76.  Reports  to  be  Called  For.  The  bank  commissioner  shall 
have  power  at  any  time  when  he  deems  it  necessary,  to  call  upon 
any  bank  or  trust  company  organized  under  the  laws  of  this  State 
for  a  report  of  its  condition  upon  any  given  day  which  is  past  and  as 
often  as  the  bank  commissioner  may  deem  it  necessary;  provided, 
that  he  shall  require  at  least  four  such  reports  during  each  and 
every  calendar  year.  Acopy  of  each  call  made  by  the  bank  com¬ 
missioner  shall  be  mailed  to  each  such  bank. 

History.  Sec.  4232  C.  O.  S.  1921;  R.  L.  340;  S.  L.  1907-8,  p.  144. 

DEPARTMENTAL  HEADS  TO  REPORT  ITEMS  OF  INDEBTED¬ 
NESS. 

77.  Items  of  Indebtedness — Reports. 

Section  1.  That  on  the  1st  day  of  January,  April,  July  and 
October  of  each  year  the  heads  of  all  departments  of  State  Govern¬ 
ment  and  the  heads  of  all  State  institutions  shall  report  to  the  State 
Board  of  Affairs  on  forms  prescribed  by  the  Attorney  General  all 
items  of  indebtedness,  other  than  taxes,  which  have  been  due  the 
State  of  Oklahoma  or  any  department  or  institution  thereof  for 
more  than  sixty  (60)  days  by  any  person,  firm,  or  corporation  or 
county. 

State  Board  of  Affairs. 

Section  2.  That  on  the  15th  day  of  January,  April,  July  and 
October  of  each  year  the  State  Board  of  Affairs  shall  furnish  the 
Attorney  General  on  forms  prescribed  by  said  Attorney  General 
a  compiled  report  based  on  the  reports  required  under  the  pro¬ 
visions  of  section  1  hereof.  Upon  receiving  any  such  compiled  re¬ 
port  from  said  Board,  it  shall  be  the  duty  of  the  Attorney  General 


Departmental  Heads — Indebtedness 


45 


to  institute  necessary  proceedings  to  collect  all  items  of  indebted¬ 
ness  shown  in  said  compiled  report. 

History.  C.  96,  S.  L.  1924. 

This  does  not  apply  to  affairs  of  insolvent  state  banks.  Their  debts  are 
to  creditors  and  thru  the  commissioner,  the  state  winds  up  their 
affairs. 

78.  Commissioner  to  Wind  Up  Affairs  of  Banks,  When. 

Whenever  any  bank  or  trust  company  organized  or  existing  under 
the  laws  of  this  State  shall  voluntarily  place  itself  in  the  hands 
of  the  bank  commissioner,  or  whenever  any  judgment  shall  be 
rendered  by  a  court  of  competent  jurisdiction,  adjudging  and  de¬ 
creeing  that  such  bank  or  trust  company  is  insolvent,  or  whenever 
its  right  or  franchises  to  conduct  a  banking  business  under  the  laws 
of  this  State  have  been  adjudged  to  be  forfeited,  or  whenever  the 
bank  commissioner  shall  become  satisfied  of  the  insolvency  of  any 
such  bank  or  trust  company,  he  may,  after  due  examination  of  its 
affairs,  take  possession  of  said  bank  or  trust  company  and  its 
assets,  and  proceed  to  wind  up  its  affairs  and  enforce  the  personal 
liability  of  the  stockholders,  officers  and  directors. 

History.  Sec.  4165  C.  O.  S.  1921;  R.  L.  302;  S.  L.  1907-8,  p.  140. 

Where  Commissioner  takes  assets  of  insolvent  bank,  he  does  not  take 
same  for  value  without  notice  but  subject  to  all  claims  and  defenses 
that  might  be  interposed  against  the  bank. 

Bailey  vs.  State;  72  Okla.  203,  179  Pac.  615. 

Ward  vs.  Bank,  51  Okla.  193,  151  Pac.  852. 

Briscoe  vs.  Hawer,  50  Okla.  287,  150  Pac.  1101. 

In  the  absence  of  evidence,  presumption  is  Bank  Commissioner  did  every¬ 
thing  required  by  law  in  selling  assets  of  insolvent  bank. 

Williamson  H.  P.  vs.  Bank  68  Okla.  40,  171  Pac.  453. 

This  section  authorizes  bank  to  voluntarily  surrender  its  assets  for 
liquidation. 

U.  S.  vs.  Oklahoma  261  U.  S.  253,  67  L.  ed.  638,  43  S.  Ct.  295. 

Taking  a  state  bank  by  the  Commissioner  is  not  a  voluntary  assignment 
nor  an  act  of  bankruptcy  in  meaning  of  Sec.  3466,  Rev.  Stat.  U.  S. 

U.  S.  vs.  Oklahoma  supra. 

Strain  vs.  U.  S.  F.  &  G.  292  Fed.  696. 

The  term  “wind  up”  embraces  the  entire  process  of  liquidation. 

Kimbriel  vs.  State  106  Okla.  177,  233  Pac.  420. 

State  ex  rel  vs.  Norman  86  Okla.  36,  206  Pac.  522. 

White  vs.  State  ex  rel  94  Okla.  220  Pac.  624. 

Statute  of  limitation  does  not  run  against  state  on  a  note  held  by  Bank 
Commissioner  as  assets  of  insolvent  bank. 

White  vs.  State  (supra). 

State  vs.  Smith  77  Okla.  277,  188  Pac.  96. 

State  vs.  Bank  88  Okla.  154,  212  Pac.  321. 

State  vs.  Ware  82  Oklaa.  130,  198  Pac.  859. 

Bank  Commissioner  has  no  lien  superior  to  that  of  a  pledge  upon  col¬ 
lateral  to  a  loan  given  by  bank  prior  to  failure. 

Commerce  Trust  Co.  vs.  State  59  Okla.  14,  157  Pac.  717. 


46 


Mothersead,  Bank  Commv  v. 

79.  Failed  Banks — Repair  of  Credit. 

Section  7.  That  Section  4169  of  the  Compiled  Oklahoma  Stat¬ 
utes,  annotated,  1921,  be  and  the  same  is  hereby  amended  to  read 
as  follows: 

“  Section  4169.  After  the  Bank  Commissioner  shall  have 
taken  possession  of  any  bank  or  trust  company  which  is  subject 
to  the  provisions  of  this  Chapter,  the  stockholders  thereof  may  re¬ 
pair  its  credit,  restore  or  substitute  its  reserves,  and  otherwise  place 
it  in  condition  so  that  it  is  qualified  to  do  a  general  banking  busi¬ 
ness  as  before  it  was  taken  possession  of  by  the  Bank  Commissioner ; 
but  such  bank  shall  not  be  permitted  to  reopen  its  business  until 
the  Bank  Commissioner,  after  a  careful  investigation  of  its  affairs, 
is  of  the  opinion  that  its  stockholders  have  complied  with  the  laws, 
that  the  bank’s  credit  and  funds  are  in  all  respects  repaired,  and  its 
reserve  restored  or  sufficiently  substituted,  and  that  it  should  be 
permitted  again  to  reopen  for  business ;  whereupon  said  Bank  Com¬ 
missioner  is  authorized  to  issue  written  permission  for  reopening 
of  said  bank  in  the  same  manner  as  permission  to  do  business  is 
granted  after  the  incorporation  thereof,  and  thereupon  said  bank 
may  be  reopened  to  do  a  general  banking  business. 

History.  Sec.  7,  C.  137,  S.  L.  1923;  amending  Sec.  4169  C.  O.  S.  1921; 
R.  L.  306. 

This  section  is  only  provision  by  which  an  insolvent  bank  may  re¬ 
organize. 

Bank  vs.  Lee,  65  Okla.  280,  166  Pac.  186. 

Western  Casualty  Co.  vs.  Bank  68  Okla.  181,  172  Pac.  954. 

Commissioner  may  accept  note  and  mortgage  and  sue  on  same. 

Marshall  vs.  State  59  Okla.  243,  158  Pac.  1166. 

Bank  Commissioner  has  no  power  to  sell  assets  of  insolvent  bank  with¬ 
out  approval  of  District  Court  or  a  Judge  thereof  and  such  attempted 
sale  is  void  unless  approved. 

National  Surety  Co.  vs.  Bank  74  Okla.  176,  177  Pac.  574. 

80.  Liquidating  Agents  and  Attorneys. 

Section  1.  That  Section  3,  Chapter  137,  of  the  Session  Laws 
of  Oklahoma,  1923,  be,  and  the  same  is  hereby  amended  to  read 
as  follows: 

“Section  3.  In  the  event  the  Bank  Commissioner  shall  pro¬ 
ceed  to  wind  up  the  affairs  of  any  bank  or  trust  company,  as  pro¬ 
vided  for  in  Section  4165,  Compiled  Oklahoma  Statutes,  Annotated, 
1921,  the  Bank  Commissioner  may  appoint  such  liquidating  agents, 
attorneys  and  employees  as  may  be  necessary  to  assist  in  the  liqui¬ 
dation  of  the  assets  of  said  failed  bank.  Such  liquidating  agents 
shall,  before  entering  upon  the  duties  of  their  office,  execute  to 
the  State  of  Oklahoma,  a  fidelity  bond  in  such  amount  as  the  Bank 
Commissioner  shall  designate,  such  bond  to  be  approved  by  the 
Bank  Commissioner  and  filed  in  his  office.  The  bond  of  such  liqui¬ 
dating  agent  shall  be  conditioned  upon  the  faithful  accounting  to 


Departmental  Heads — Indebtedness 


47 


the  Bank  Commissioner  for  all  moneys,  funds  and  assets  as  shall 
come  into  his  possession  as  such  liquidating  agent  upon  the  demand 
of  the  Bank  Commisioner.  The  compensation  of  such  liquidating 
agents  or  attorneys  shall  not  exceed  the  sum  of  $4,000  per  year. 
Such  liquidating  agents  and  attorneys  shall  hold  their  office  at  the 
will  and  pleasure  of  the  Bank  Commissioner  and  such  liquidating 
agents  shall  submit  to  the  Bank  Commissioner  a  verified  monthly 
account,  giving  in  detail  a  statement  of  all  receipts  and  disburse¬ 
ments  made  from  the  assets  in  their  possession,  and  each  three 
months  after  the  appointment  of  such  liquidating  agent,  he  shall 
file  with  the  Court  of  the  County,  in  which  the  said  bank  was  lo¬ 
cated,  a  complete  statement  setting  forth  in  detail  all  receipts  and 
disbursements  for  such  period  of  time.  No  disbursements  of  the 
assets  of  the  said  banking  corporation,  shall  be  made,  except  upon 
the  order  of  the  Bank  Commissioner.  The  Bank  Commissioner 
shall  have  power  and  authority  to  institute  and  prosecute  all  suits 
necessary  for  the  liquidation  of  the  assets  of  the  insolvent  cor¬ 
porations  taken  over  by  him  and  such  suits  shall  be  brought  in  the 
name  of  the  State  of  Oklahoma  on  the  relation  of  the  Bank  Commis¬ 
sioner.  If,  after  the  liquidation  of  such  insolvent  corporation, 
wherein  the  depositors  and  creditors  of  said  insolvent  corporation 
shall  have  been  paid  in  full,  there  remain  in  the  hands  of  the  Bank 
Commissioner  any  assets,  such  remaining  assets  shall  revert  to  the 
stockholders  of  said  insolvent  corporation.  Nothing  in  this  amend¬ 
ment  shall  operate  to  deprive  the  State  of  Oklahoma  of  any  lien 
that  it  may  have  on  the  assets  of  any  bank  that  may  have  been 
adjudged  insolvent  prior  to  the  passage  and  approval  of  this  Act.  ” 

History.  Sec.  1,  C.  80,  S.  L.  1924;  amending-  Section  3,  C.  137,  S.  L. 

1923,  and  Sec.  4166  C.  O.  S.  1921;  R.  L.  303. 

Prior  to  C137,  L.  1923,  there  was  no  authority  for  appointments  of  liqui¬ 
dating  agent  by  courts. 

In  re  Liq.  Bank  110  Okla.  295,  237  Pac.  603. 

State  ex  rel  vs.  Norman  86  Okla.  36,  206  Pac.  522. 

Reeves  vs.  Noble  88  Okla.  179,  212  Pac.  998. 

81.  Notice — Resumption  of  Business — Debts. 

Section  2.  On  taking  possession  of  the  property  of  any  bank, 
the  bank  commissioner  shall  forthwith  give  notice  of  such  fact  to 
all  banks,  trust  companies  and  individual  firms  or  persons  holding 
or  in  possession  of  its  assets.  No  bank,  trust  company,  savings 
bank,  firm  or  individual,  knowing  of  such  taking  possession  by  the 
bank  commissioner  or  notified  as  aforesaid,  shall  have  a  lien  or 
charge  for  any  payment,  advance  or  clearance  thereafter  made  or  li¬ 
ability  thereafter  incurred  against  any  of  its  assets.  Such  bank  may, 
with  the  consent  of  the  Bank  Commissioner,  resume  business  upon 
such  conditions  as  may  be  approved  by  him.  Upon  taking  possession 
of  the  property  and  business  of  such  bank  the  commissioner  is 
authorized  to  collect  money  due  it  and  do  such  other  acts  as  are 
necessary  to  conserve  its  assets  and  business  and  shall  proceed  to 


48  Mothersead,  Bank  Commv  v. 

liquidate  the  affaiars  thereof,  as  hereinafter  provided.  The  com¬ 
missioner  shall  collect  all  debts  due  and  claims  belonging  to  it  and, 
upon  the  order  of  the  District  Court  of  the  County  in  which  it  is 
doing  business,  may  sell  or  compound  all  bad  or  doubtful  debts 
and,  on  like  order,  may  sell  all  its  real  and  personal  property  on 
such  terms  and  at  public  or  private  sale,  as  the  court  shall  direct, 
and  shall  enforce  the  liability  of  stockholders  of  such  bank. 

History.  Sec.  2,  C.  80,  S.  L.  1924;  repealing  Sec.  4167  C.  O.  S.  1921; 
R.  Li.  304. 

Bank  Commissioner  had  no  power  to  sell  assets  except  upon  order  of 
Court  or  Judge  thereof. 

National  Surety  Co.  vs.  Bank  74  Okla.  176,  177  Pac.  574. 

Presumption  is  Commissioner  obtained  Court  order. 

Williamson  vs.  State  68  Okla.  40,  171  Pac.  453. 

82.  Stockholders’  Liability  Due  on  Failure. 

The  stockholders’  liability  of  such  bank  shall  become  due  and 
payable  upon  the  date  of  the  taking  possession  of  the  property  of 
any  such  bank  by  the  bank  commissioner,  and  the  order  of  the 
bank  commissioner  finding  the  bank  to  be  insolvent  shall  be  con¬ 
clusive  evidence  of  that  fact  and  the  liability  of  said  stockholders 
shall  bear  interest  at  the  rate  of  six  (6%)  per  cent  per  annum  from 
the  date  of  the  taking  possession  of  the  property  of  such  bank 
by  the  bank  commissioner. 

History.  Part  of  Sec.  2,  C.  80,  L.  1924. 

83.  Compound  Double  Liability  to  Guaranty  Fund. 

Section  1.  That  the  Bank  Commissioner  of  the  State  of  Ok¬ 
lahoma  be  and  he  hereby  is  authorized  to  sell  or  compound  the 
additional  liability  of  stockholders  of  insolvent  State  banks  which 
may  be  due  and  payable  to  the  Guaranty  Fund  of  the  State  of  Ok¬ 
lahoma  upon  an  order  of  the  district  court  or  a  judge  thereof  of 
the  county  in  which  said  insolvent  State  Bank  was  doing  business ; 
provided,  that  this  act  shall  not  apply  to  the  liquidation  of  any  bank 
where  no  moneys  were  expended  from  the  Guaranty  Fund;  or 
warrants  issued  against  the  Guaranty  Fund;  or  contracts  in  lieu 
of  guaranty  fund  warrants. 

History.  S.  B.  191,  S.  L.  1925. 

84.  Claims — Notice  to  Creditors. 

Section  3.  Immediately  on  taking  charge  of  any  failed  bank, 
the  commissioner  shall  cause  notice  to  be  given  by  advertisement 
in  such  newspapers  as  he  may  direct  weekly  for  eight  consecutive 
weeks,  calling  on  all  persons  who  may  have  claims  against  such 
bank  to  present  the  same  to  him  and  make  legal  proof  thereof  at 
a  place  and  at  a  time  to  be  fixed  by  the  Commissioner.  The  Com¬ 
missioner  shall  mail  a  similar  notice  to  all  persons  whose  names 
appear  as  creditors.  If  the  Commissioner  doubts  the  justice  and 
the  validity  of  any  claim,  he  may  reject  the  same,  serve  notice  of 


Departmental  Heads — Indebtedness 


49 


such  rejection  upon  the  claimant,  either  by  mail  or  personally,  and 
affidavit  of  the  service  of  such  notice,  which  shall  be  prim  a  facie 
evience  thereof,  shall  be  filed  with  the  Commissioner.  Claims  pre¬ 
sented  after  the  expiration  of  the  notice  fixed  for  creditor  shall 
be  entitled  to  share  in  the  distribution  only  to  the  extent  of  the 
assets  in  the  hands  of  the  Commissioner  equitably  applicable  there¬ 
to. 

History.  Sec.  3,  C.  80,  S.  L.  1924. 

85.  Inventory — Compensation. 

Section  4.  Upon  taking  possession  of  the  property  or  the 
assets  of  such  bank,  the  commissioner  shall  make  an  inventory  of 
the  assets  in  duplicate ;  one  to  be  filed  in  the  office  of  the  commis¬ 
sioner,  one  in  the  office  of  the  Court  Clerk  of  the  County  in  which 
the  said  bank  was  doing  business,  and  the  Court  Clerk  of  said 
County  shall  give  such  case  a  number  on  the  District  Court  docket. 
Upon  the  expiration  of  the  time  fixed  for  the  presentation  of  claims, 
the  commissioner  shall  make  in  duplicate  a  full  and  complete  list 
of  the  claims  presented  and  specifying  such  claims  as  have  been 
rejected  by  him;  one  to  be  filed  in  the  office  of  the  commissioner 
and  one  in  the  office  of  the  Court  Clerk  in  the  County  in  which  the 
said  bank  was  located;  such  inventory  and  lists  of  claims  shall  be 
open  at  all  reasonable  times  for  inspection. 

History.  Sec.  4,  C.  80,  S.  L.  1924. 

Note:  Prior  to  Act  C.  137,  S.  L.  1923,  no  report  was  required  to  be  filed 

in  District  Court.  This  Act  repeals  Sec.  3,  C.  137,  S.  L.  1923.  (See 

Sec.  11,  C.  80,  S.  L.  1924). 

86.  Compensation  of  Agents  and  Attorneys — Notice  to  Banks. 

The  compensation  of  the  liquidating  agent,  counsel  and  em¬ 
ployees  of  such  failed  bank  and  all  expenses  of  liquidation  shall 
be  fixed  by  the  commissioner,  subject  to  the  approval  of  the  Dis¬ 
trict  Court  or  a  Judge  thereof,  on  notice  to  the  failed  bank,  and 
shall,  upon  the  certificate  of  the  commissioner,  be  paid  out  of  the 
funds  in  the  hands  of  the  Commissioner  derived  from  the  assets 
of  such  bank.  The  notice  to  such  bank  shall  be  served  on  any 
person  authorized  by  law  to  receive  on  a  banking  corporation  in 
the  State  of  Oklahoma,  such  notice  of  such  hearing  may  be  served 
by  any  person  and  shall  designate  the  time  and  the  place  of  such 
hearing,  which  hearing  shall  not  be  less  than  five  (5)  days  from 
the  date  of  such  service. 

Note:  Sec.  4  is  divided  into  this  and  prior  section  for  convenience.  (See 

3,  C.  137,  S.  L.  1923,  repealed). 

87.  Assets  Collected  and  Deposited. 

Section  5.  The  moneys  collected  by  the  commissioner  shall 
be  from  time  to  time  deposited  in  one  or  more  banks  of  deposit, 
savings  bank  or  trust  companies,  and,  as  security  therefor,  shall  take 
such  security  as  is  required  for  the  deposit  of  other  public  funds. 

History.  Sec.  5,  C.  80,  S.  L.  1924. 


50 


Mothersead,  Bank  Comm.,  v. 


88.  Dividends — Partial  and  Final. 

At  any  time  after  the  expiration  of  the  date  fixed  for  present¬ 
ation  of  claims,  the  commissioner  may,  ont  of  the  funds  remaining 
in  his  hands  for  the  payment  of  expenses,  declare  one  or  more 
dividends  and,  after  the  expiration  of  one  year  from  the  first  pub¬ 
lication  notice  to  creditors,  may  declare  a  final  dividend;  such 
dividend  to  be  paid  to  such  persons  and  in  such  amount  and  upon 
such  notice  as  may  be  directed  by  the  District  Court  or  a  Judge 
thereof.  Objections  to  any  claim  not  rejected  by  the  commissioner 
may  be  made  by  any  party  interested  by  filing  a  copy  of  such  re¬ 
jection  with  the  commissioner,  who  shall  present  the  same  to  the 
District  Court  or  a  Judge  thereof  at  the  time  of  the  next  appli¬ 
cation  to  declare  a  dividend.  The  Court  thereupon  shall  make  such 
order  as  is  necessary  in  allowing  or  disallowing  such  claim  or  any 
part  thereof. 

History.  Sec.  5,  C.  80,  S.  L.  1924. 

Note:  This  and  prior  section  divided  for  convenience. 

89.  Dividends — Reversion — Limitations. 

Section  6.  Dividends  remaining  unpaid  in  the  hands  of  the 
commissioner  for  six  months  after  the  order  for  final  distribution 
shall  be  by  hint  deposited  in  one  or  more  banks,  trust  companies 
or  savings  banks  to  the  credit  of  the  commissioner,  in  his  name  of 
office,  in  trust  for  the  several  depositors  and  creditors  of  the  liqui¬ 
dated  corporation  from  which  they  were  entitled  thereto ;  and  no 
provision  shall  be  made  for  paying  unclaimed  deposits  unless  proof 
of  claim  has  been  made  as  provided  hereunder  within  two  years 
from  the  date  on  which  the  Bank  Commissioner  takes  over  the 
assets  of  the  liquidated  corporation  and  the  owners  of  such  un¬ 
claimed  deposits  shall  be  forever  barred  from  participating  in  any 
of  the  assets  of  said  corporation,  unless  proof  of  claim  is  so  made 
within  the  said  two  years.  All  such  unclaimed  deposits  and  funds 
remaining  in  the  hands  of  the  bank  commissioner  at  the  end  of 
the  said  two  (2)  years  shall  revert  to  the  State  of  Oklahoma  and 
shall  be  delivered  by  the  Bank  Commissioner  to  the  State  Treas¬ 
urer  as  other  fees  earned  by  the  State  Banking  Department. 

History.  Pec.  6,  C,  80,  S.  L.  1924. 


90.  Collateral — Redemption  of. 

Section  7.  Whenever  the  Commissioner  shall  take  charge  of 
the  affairs  of  any  bank  under  the  provisions  of  this  Act,  he  shall 
have  the  right  within  120  days  thereafter  to  redeem  any  collateral 
which  may  have  been  previously  pledged  by  said  bank  as  security 
for  any  debt  of  said  bank,  and  no  sale  of  such  collateral  within  said 
120  days  by  anyone  holding  the  same  shall  be  valid,  and  this  section 
shall  be  considered  as  constituting  a  part  of  every  contract  by 
which  such  collateral  may  be  pledged,  as  aforesaid.  The  Bank 
Commissioner  may,  if  he  deems  proper,  after  having  produced  the 
authority  so  to  do  by  the  District  Court  or  a  Judge  thereof  of  the 


Departmental  Heads — Indebtedness 


51 


County  in  which  said  bank  was  located,  pay  off  out  of  the  assets 
of  said  failed  bank  any  prior  liens  or  claims  against  any  of  the 
assets  of  said  bank. 

History.  Sec.  7,  C.  80,  S.  L.  1924. 

91.  Real  Estate — Prior  Mortgages — Limitations. 

Section  7.  The  holder  or  owner  of  any  lien  against  any  of  the 
real  property  belonging  to  such  bank  and  in  the  hands  of  the 
Bank  Commissioner  or  on  which  real  property  the  bank  has  a  lien, 
shall  not  be  foreclosed  or  any  proceedings  be  taken  thereon  for  a 
period  of  twelve  (12)  months  from  the  date  the  assets  of  said  bank 
were  taken  over  by  the  Bank  Commissioner,  except  by  the  con¬ 
sent  of  the  Bank  Commissioner  and  during  the  said  period,  no 
Court  in  the  State  of  Oklahoma  shall  have  jurisdiction  to  foreclose 
any  such  lien  or  mortgage  on  such  real  estate  except  with  the 
permission  and  on  the  application  of  the  Bank  Commissioner. 

History.  Sec.  7,  C.  80,  S.  L.  1924. 

Note:  Liens  on  personal  and  real  estate  separated  for  convenience. 

Evidently  it  was  intended  that  the  holder  could  not  foreclose. 

92.  Title  in  State — Cost  Deposits. 

Section  7.  The  State  of  Oklahoma,  on  the  relation  of  the 
Bank  Commissioner,  shall  be  deemed  to  be  the  owner  of  all  of  the 
assets  of  failed  banks  in  his  hands  for  the  use  and  benefit  of  the 
depositors  and  creditors  of  said  bank,  and  no  deposit  for  cost  shall 
be  required  in  any  courts  of  the  State  of  Oklahoma,  in  which  the 
State  of  Oklahoma,  on  the  relation  of  the  Bank  Commissioner,  is 
a  party  and  no  costs  shall  be  taxed  against  the  State  of  Oklahoma 
and  paid  by  the  State  of  Oklahoma,  on  the  relation  of  the  Bank 
Commissioner,  in  any  such  suits,  and  it  shall  be  the  duty  of  all 
the  Courts  of  the  State  of  Oklahoma  and  all  the  officers  of  the 
State  or  County  to  give  preference  to  all  matters  pending  in  such 
Courts  in  which  the  State  of  Oklahoma,  on  the  relation  of  the  Bank 
Commissioner,  is  a  party. 

History.  Sec.  7,  C.  80,  S.  L.  1924. 

Note:  By  C.  203  L.  1923,  the  state  is  not  required  to  execute  any  bond 
of  any  character. 

93.  Assets — Sale — Compound. 

Section  8.  None  of  the  assets  of  any  such  failed  bank  shall 
be  sold,  or  bad:  and  doubtful  debts  compounded  by  the  Bank  Com¬ 
missioner,  except  on  the  order  of  the  District  Court,  and  the  failed 
bank  must  be  notified  of  the  hearing  of  any  such  application  be¬ 
fore  any  such  District  Court  or  a  Judge  thereof  for  at  least  five  (5) 
days  prior  to  such  hearing.  Such  notice  may  be  served  by  any 
person  and  a  service  be  made  on  the  persons  designated  by  law 
to  receive  service  on  a  banking  corporation. 

History.  Sec.  8,  C.  S.  L.  1924. 


52 


Mothersead,  Bank  Comm.,  v. 


94.  Assets — Guaranty  Fund — Title. 

Section  9.  The  title  to  the  assets  of  failed  banks  belonging  to 
the  State  Guaranty  Fund  is  hereby  vested  in  the  Bank  Commissioner 
for  the  purpose  of  liquidation  and  the  said  Bank  Commissioner  is 
authorized  to  liquidate  such  assets  in  the  same  manner  that  the 
assets  of  other  banks  are  liquidated,  and  the  proceeds  of  such  liqui¬ 
dation,  and  the  proceeds  thereof  shall  be  paid  into  the  State  Guar¬ 
anty  Fund  for  the  purpose  of  retiring  the  outstanding  Guaranty 
Fund  Warrants. 

History.  Sec.  9,  C.  80,  S.  L.  1924. 

With  repeal  of  Guaranty  Law,  title  to  assets  was  left  “in  air”  and  by 

this  section  the  Commissioner  can  reduce  to  cash. 

95.  Retroative  Act. 

Section  10.  The  provisions  of  this  Act  shall  apply  to  all  banks 
now  in  liquidation,  as  well  as  all  banks  that  fail  after  the  passage 
and  approval  of  this  Act;  provided,  this  Act  shall  not  apply  to  any 
bank  which  was  taken  over  by  the  Bank  Commissioner  more  than 
two  (2)  years  prior  to  the  passage  and  approval  of  this  Act. 

History.  Sec.  10,  C.  80,  S.  L.  1924. 

Note:  Act  approved  March  22,  1924.  This  section  refers  to  Sections 

80  to  94  inclusive  of  this  compilationl  except  Sec.  83. 

96.  Surety  Companies — Participation. 

Section  4.  That  Section  4189  of  Compiled  Oklahoma  Statutes 
Annotated,  1921,  be  and  the  same  is  hereby  amended  to  read  as 
follows : 

“  Section  4189.  On  and  after  the  passage  and  approval  of  this 
Act,  in  all  cases  where  a  Surety  Company  is  compelled  to  pay  or 
voluntarily  pays  a  depository  bond  securing  the  payment  of  de¬ 
posits  of  any  State,  County,  Municipal  or  other  public  funds  for 
which  it  is  liable  in  a  failed  bank  operating  under  the  laws  of 
this  State,  such  surety  company  shall  be  entitled  to  participate  in 
a  pro  rata  division  of  the  proceeds  of  the  assets  of  any  such  bank, 
including  the  liability  of  its  officers,  stockholders  and  directors 
with  the  depositors  of  said  bank ;  and  the  Bank  Commissioner  shall 
have  exclusive  control  of  the  administration  and  collection  of  the 
assets  of  failed  banks  for  payment  of  depositors  until  the  deposit¬ 
ors  shall  have  been  fully  reimbursed  or  the  liquidation  of  said  bank 
completed,  and  the  Bank  Commissioner  and  his  liquidating  agent 
shall  pay  to  such  surety  company  the  pro  rata  share  of  the  pro¬ 
ceeds  of  such  assets  from  time  to  time  as  collections  from  such 
assets  are  made;  and  such  surety  company  in  writing  such  a  de¬ 
pository  bond  for  any  such  bank,  specifically  agrees  to  such  ad¬ 
ministration,  and  that  the  Bank  Commissioner’s  jurisdiction  shall 
be  exclusive ;  provided,  that  the  provisions  of  this  Section  do  not  ap¬ 
ply  to  state  banks  that  failed  prior  to  the  passage  and  approval 
of  this  Act.” 


Violation  of  Bank  Laws 


53 


History.  Sec.  4,  C.  137,  1923  S.  L.,  amending  Sec.  4189.  C.  O.  S.  1921. 

Ann.  Old  act  (4189)  unconstitutional. 

State  ex  rel  vs.  Johnson  90  Okla.  21,  215  Pac.  945. 

VIOLATIONS  OF  BANK  LAWS 

97.  Officer — Borrowing  Money. 

Section  1.  That  Section  4127  of  Compiled  Oklahoma  Statutes 
Annotated,  1921,  be  and  the  same  is  hereby  amended  to  read  as 
follows : 

“  Section  4127.  It  shall  be  unlawful  for  any  active  managing 
officer  of  any  bank  organized  or  existing  under  the  laws  of  Ok¬ 
lahoma,  to  borrow,  directly  or  indirectly,  money  from  the  bank 
with  which  he  is  connected;  and  the  officer  making  or  authorizing 
a  loan  to  any  person,  as  well  as  the  person  receiving  the  same, 
shall  be  deemed  guilty  of  the  larceny  of  the  amount  borrowed  and 
shall  be  punished  by  imprisonment  in  the  penitentiary  for  not 
less  than  five  (5)  years  nor  more  than  fifteen  (15)  years. 

History.  Sec.  1,  C.  137,  S.  L.  1923:  amending  Section  4127,  C.  O.  S. 
1921;  R.  L.  270. 

President  of  Bank,  member  of  Board  of  Directors  is  within  prohibition 
of  this  statute. 

Bank  vs.  Bank  56  Okla.  529,  156  Pac.  352. 

Eubank  vs.  Bank  216  Fed.  833,  133  C.  C.  A.  37. 

Loan  made  in  violation  of  this  statute  not  void,  and  debtor  cannot  de¬ 
feat  recovery  of  such  ground. 

Schuber  vs.  McDuffee  67  Okla.  160,  169  Pac.  642. 

Loan  by  Cashier  of  bank  funds  to  another  with  whom  cashier  was  part¬ 
ner  is  violative  of  this1  section  and  cashier  cannot  retain  the  profits 
therefrom. 

Sharpe  vs.  Wright  88  Okla.  16,  211  Pac.  71. 

This  act  applies  only  to  actual  managing  officers  of  banks  and  not  to 
intermediary  used  by  bank  official  to  obtain  illegal  loan. 

Ernest  vs.  State  16  Okla.  Cr.  507,  184  Pac.  793. 

Such  intermediary  is  not  an  accomplice. 

Ernest  vs.  State  (supra). 

The  Bank  officer  who  is  beneficially  interested  in  said  loan  violates 
this  statute. 

Ernest  vs.  State  (supra). 

98.  False  Reports— Penalty.  Every  officer,  director,  agent  or 
clerk  of  any  bank  doing  business  under  the  laws  of  the  State  of 
Oklahoma  who  shall  wilfully  and  knowingly  subscribe  to  or  make 
any  false  report  or  any  false  statement  or  entries  in  the  book  of 
such  bank,  or  knowingly  subscribe  to  or  exhibit  any  false  writing 
or  paper,  with  the!  intent  to  deceive  any  person  as  to  the  condition 
of  such  bank,  shall  be  deemed  guilty  of  a  felony,  and  shall  be  pun¬ 
ished  by  a  fine  not  to  exceed  one  thousand  dollars,  or  by  imprison¬ 
ment  in  th&  penitentiary  not  exceeding  five  years,  or  by  both  such 
fine  and  imprisonment. 9  ’ 


54 


Mothersead,  Bank  Comm.,  v. 


History.  Sec.  4126  C.  O.  S.  1921;  R.  L.  269;  S.  L.  1907-1908,  p.  131. 
This  statute  makes  violation  thereof  a  felony  but  does  not  make  a  note 
given  for  the  benefit  of  bank  void. 

Leonard  vs.  Bank  236  Fed.  316. 

An  information  charging  substantially  the  language  of  the  statute  is 
sufficient. 

Anderson  vs.  State  (Okla.)  205  Pac.  510. 

Anderson  vs.  State  (Okla.)  207  Pac.  977. 

Books  and  records  of  a  bank,  properly  identified  are  admissable  in 
evidence. 

Appleget  vs.  State  (Okla.)  243  Pac.  251. 

They  are  evidence  of  its  condition  and  to  show  knowledge  of  insol¬ 
vency  to  officer  thereof. 

Appleget  vs.  State  (supra). 

Report  and  criticism  of  bank  by  examiner  is  admissable. 

Appleget  vs.  State  (supra). 

Hays  vs.  State  (Okla.  Cr.)  210  Pac.  729.  . 

Mathews  vs.  State  (Okla.)  198  Pac.  113. 

State  vs.  Welty  65  Wash.  244,  118  Pac.  10. 

99.  Receiving  Deposits  While  Insolvent — Penalty.  No  bank 
shall  accept  or  receive  on  deposit,  with  or  without  interest,  any 
money,  bank  bills  or  notes,  or  United  States  treasury  notes,  gold 
or  silver  certificates,  or  currency,  or  other  notes,  bills,  checks,  or 
drafts,  when  such  bank  is  insolvent;  and  any  officer,  director, 
cashier,  manager,  member,  party  or  managing  party  of  any  bank 
who  shall  knowingly  violate  the  provisions  of  this  section,  or  be 
accessory  to  or  permit  or  connive  at  the  receiving  or  accepting  of 
any  such  deposit,  shall  be  guilty  of  a  felony,  and  upon  conviction 
thereof  shall  be  punished  by  a  fine  not  exceeding  five  thousand  dol¬ 
lars,  or  by  imprisonment  in  the  penitentiary  not  exceeding  five 
years,  or  by  both  such  fine  and  imprisonment. 

History.  Sec.  4128  C.  O.  S.  1921;  R.  L.  271;  S.  L.  1907-8,  p.  132. 

A  Bank  is  insolvent  within  meaning  of  this  section  when  the  actual 
cash  market  value  of  its1  assets  is  not  equal  to  its  debts  and  lia¬ 
bilities  and  when  it  is  unable  by  pledging  its  assets  and  credit  to  raise 
in  a  reasonable  time  funds  to  meet  its  debts  and  pay  depositors  in 
the  ordinary  course  of  business. 

Appleget  vs.  State  (Okla.)  243  Pac.  251. 

This  section  covering  insolvency,  not  controlled  by  Sec.  4135  C.  O.  S.  ’21. 
Appleget  vs.  State  (supra). 

Where  cashier  induces  depositor  to  leave  money  on  deposit  by  false 
representations  as  to  banks  condition,  he  is  personally  liable  to  such 
depositor  in  event  of  failure. 

Hughes  vs.  Martin  81  Okla.  89,  196  Pac.  953. 

The  Bank  Commissioner  is  a  "party  or  managing  party”  as  is  defined 
this  statute. 

State  vs.  Dennis  (Okla.  Cr.)  230  Pac.  935. 

Insolvency  may  be  proven  by  general  reputation  when  properly  re¬ 
stricted. 

Appleget  vs.  State  (supra). 


Violation  of  Bank  Laws 


55 


Ellis  vs.  State  138  Wis.  513,  119  N.  W.  1110,  20  L  .R.  A.  N.  S.  44b. 

Skardo  vs.  State  118  Ark.  176,  175  N.  W.  1190. 

Public  records  of  banking:  department  ore  admissable  in  evidence. 

Hays  vs.  State  (Okla.)  210  Pac.  729. 

Mathews  vs.  State  (Okla.)  198  Pac.  113. 

Applegret  vs.  State  (supra). 

Mannual  receipt  of  deposit  by  bank  officer  not  necessary.  If  insol¬ 
vent  and  the  officer  knew  it  was  insolvent,  but  permitted  bank  to 
run,  he  is  guilty. 

State  vs.  Mitchell  96  Miss.  259,  51  So.  4. 

Appleget  vs.  State  (supra). 

100.  False  Advertising — Misuse  of  Term  “Bank”.  It  shall  be 
unlawful  for  any  individual,  firm,  association  or  corporation  to  re¬ 
ceive  money  upon  deposit  or  transact  a  banking  business  except 
as  authorized  by  the  laws  of  the  State  of  Oklahoma,  or  of  the 
United  States,  or  to  use  or  advertise,  in  connection  with  any  busi¬ 
ness  other  than  the  banking  business,  conducted  under  the  bank¬ 
ing  laws  of  this  State,  the  words :  Banker,  bankers,  investment 
banker,  or  any  other  word  or  term,1  calculated  to  deceive  the  public 
into  belief  that  such  person,  firm,  association  or  corporation,  is 
engaged  in  the  banking  business.  Any  person,  firm,  association  or 
corporation  violating  any  of  the  provisions  of  this  section,  either 
individually  or  as  an  interested  party,  in  any  firm,  association  or 
corporation,  shall  be  guilty  of  a  misdemeanor,  and  upon  conviction 
thereof,  shall  be  fined  in  a  sum  not  less  than  three  hundred  dol¬ 
lars,  (300.00),  nor  more  than  one  thousand  (1,000.00),  or  by  im¬ 
prisonment  in  the  county  jail  not  less  than  thirty  days  nor  more 
than  one  year,  or  by  both  such  fine  and  imprisonment,  and  it  is  here¬ 
by  made  the  duty  of  the  attorney  General  to  enforce  the  provisions 
of  this  section;  and  inorder  to  further  prevent  the  violation  of  the 
section,  any  court  of  competent  jurisdiction  in  this  State  is  here¬ 
by  authorized  and  empowered  to  grant  an  injunction  and  appoint  a 
receiver  to  take  charge  of  the  business  and  assets  of  any 
person,  firm,  association  or  corporation  found  guilty  of  violating 
the  provisions  of  this  section,  and  to  make  all  necessary  and  proper 
orders  to  wind  up  such  business  and  prevent  a  violation  of  this 
section. 

History.  Sec.  4129  C.  O.  S.  1921;  S.  L.  1915,  p.  98;  Sec.  2,  amending 
R.  L.  272. 

The  privilege  of  engaging  in  banking  business  is  a  franchise,  conferred 
only  on  corporations.  No  individual  firm  or  corporation  than  a  bank¬ 
ing  corporation  can  transact  a  banking  business. 

Levy  vs.  Reed  69  Okla.  180,  170  Pac.  497. 

101.  Embezzlement  or  Fraud  A  Felony.  Every  president, 
director,  cashier,  teller,  clerk,  officer  or  agent  of  any  bank  who 
embezzles,  abstracts  or  wilfully  misapplies  any  of  the  moneys, 
funds,  securities  or  credits  of  the  bank,  or  who  issues  oi*  puts  forth 
any  certificate  of  deposit,  draws  any  draft  or  bill  of  exchange, 


56  Mothersead,  Bank  Comm.,  v. 

makes  any  acceptance,  assigns  any  note,  bond,  draft,  bill  of  ex¬ 
change,  mortgage,  judgment  or  decree,  or  who  makes  use  of  the 
bank  in  any  manner  with  intent  in  either  case  to  injure  or  de¬ 
fraud  the  bank  or  any  individual,  person,  company  or  corporation, 
or  to  deceive  any  officer  of  the  bank,  and  any  person  who,  with 
like  intent,  aids  or  abets  and  officer,  clerk  or  agent  in  any  viola¬ 
tion  of  this  section,  shall  be  deemed  guilty  of  a  felon,  and  upon 
conviction  thereof  shall  be  punished  as  provided  herein. 

History.  Sec.  4142  C.  O.  S.  1921;  R.  L.  285;  S.  L.  1907-1908,  p.  136. 

Suit  may  be  maintained  against  cashier  for  violating  this  section. 

Swim  vs.  Bank  109  Okla.  266,  284  Pac.  612. 

But  cashier  may  show  such  acts  as  were  done  had  the  approval  of 
the  banking  department  and  the  other  officers  of  the  Bank. 

Swin  vs.  Bank  (supra). 

Prosecution  under  general  embezzlement  statute  instead  of  this  sec¬ 
tion.  Defendant  cannot  complain. 

Snyder  vs.  State  (Ok.  Cr.)  240  Pac.  331. 

102.  Preference  to  Depositor — Penalty. 

Section  2.  That  Section  4144  of  Compiled  Oklahoma  Statutes, 
annotated  1921,  be  and  the  same  is  hereby  amended  to  read  as  fol¬ 
lows  : 

History.  Sec.  4414,  C.  O.  S.  1921;  R.  L.  287:  S.  L.  1923,  Chapter  137, 
Sec.  2. 

President  of  bank  was  guardian  for  minors  and  had  funds  in  said 
bank  belonging  to  minors  and  with  knowledge  of  its  condition  de¬ 
manded  and  took  assets  from  bank  to  secure  said  deposit,  held 
void. 

Julius  vs.  State  ex  rel  (Okla.)  237  Pac.  605  . 

103.  Penalty  for  False  Swearing.  Every  officer  or  employee 
of  a  bank  required  by  this  chapter  to  take  an  oath  or  affirmation 
who  shall  wilfully  swear  or  affirm  falsely,  shall  be  deemed  guilty 
of  perjury,  and,  upon  convicition  thereof,  shall  bo  punished  as  pro¬ 
vided  by  the  laws  of  this  State'  in  case  of  perjury. 

History.  Sec.  4154  C.  O.  S.  1921;  R.  L.  297;  S.  L.  1907-8,  p.  139. 

104.  Crimes  of  Bankers  and  Employees.  Every  officer,  dir¬ 
ector,  employee  or  agent  of  any  bank,  who  embezzles,  abstracts,  or 
wilfully  misapplies  any  of  the  moneys,  funds,  credits  or  securities 
of  the  bank,  with  intent  in  either  case  to  injure  or  defraud  the 
bank  or  individual,  person,  company  or  corporation,  or  to  deceive 
any  officer  of  the  bank,  or  the  Bank  Commissioner,  or  agent  ap¬ 
pointed  to  examine  the  affairs  of  such  bank,  and  any  person  who 
with  like  intent  aids  or  abets  any  officer,  director,  employee  or 
agent  of  such  bank  in  any  violation  of  this  section,  shall  be  deem¬ 
ed  guilty  of  a  felony,  and  upon  conviction  thereof  shall  be  punished 
by  a  fine  not  less  than  five  hundred  nor  exceeding  five  thousand 
dollars  and  imprisonment  in  the  penitentiary  for  a  period  not  less 
than  five  years  nor  more  than  fifty  years;  and  the  principal  of- 


Violation  of  Bank  Laws 


57 


fenders  and  those  aiding  and  abetting  same  may  be  charged  in  the 
same  count,  and  separate  offenses  may  be  charged,  in  separate 
counts,  in  the  same  indictment  and  tried  together. 

History.  S.  L.  1913,  p.  33,  Sec.  12;  C.  O  S.  1921,  Sec.  4178.  C.  135, 
Sec.  1,  L.  1923. 

Where  offense  may  be  committed  by  use  of  different  means,  the  meth¬ 
ods  may  be  alleged  in  the  alternative  in  same  count  in  information. 

Snoddy  vs.  State  235  Pac.  248. 

105.  Issues  False  Certificate  of  Deposit — Draft  or  Bill — Pen¬ 
alty.  Every  officer,  director,  employee  or  agent  or  any  bank, 
who  issues  or  puts  forth  any  certificate  of  deposit,  draws  any  draft 
or  bill  of  exchange,  makes  any  acceptance,  assign  any  notes,  bond, 
draft,  bill  of  exchange,  mortgage,  judgment  or  decree,  or  who  makes 
any  use  of  the  bank  in  any  manner,  with  intent  in  either  case  to 
injure  or  defraud  the  bank  or  any  individual,  person,  company  or 
corporation,  or  to  deceive  any  officer  of  the  bank  or  Bank  Com¬ 
missioner,  or  any  agent  appointed  to  examine  the  affairs  of  such 
bank,  and  any  person  who  with  like  intent  aids  or  abets  any  such 
officer,  director,  employee  or  agent  of  said  bank  to  violate  this 
section,  shall  be  giulty  of  a  felony,  and  upon  conviction  shall  be 
punished  by  a  fine  of  not  less  than  five  hundred  nor  more  than 
ten  thousand  dollars  and  by  imprisonment  in  the  penitentiary  in 
for  not  less  than  five  years,  nor  more  than  fifty  years;  and  the 
principal  offenders  and  aiders  and  abettors  may  be  charged  in 
the  same  count,  and  separate  offenses  of  the  above  classes  be 
charged  in  separate  counts  of  the  same  indictment  or  information, 
and  be  tried  together. 

History.  S.  L.  1913,  p.  34,  Sec.  13;  Sec.  4179  C.  O.  S.  1921;  C.  135, 
Sec.  2,  L.  1923. 

106.  Certify  Check,  Draft  or  Order  Without  Funds — Penalty. 

Every  officer,  director,  employee  or  agent  of  any  bank,  who  shall 
certify  any  check,  draft  or  order  drawn  upon  the  bank  unless  the 
person,  firm  or  corporation  drawing  such  check  or  order  has  on 
deposit  with  the  bank  at  the  time  such  check,  draft  or  order  is 
certified,  an  amount  of  money  equal  to  the  amount  specified  in  such 
check,  and  any  person  aiding  or  abetting  any  such  officer,  director, 
employee  or  agent  of  such  bank  so  to  do,  shall  be  deemed  guilty 
of  a  felony,  and  upon  conviction  shall  be  fined  not  more  than  five 
thousand  dollars,  or  imprisoned  not  more  than  five  years,  or 
both  such  fine  and  imprisonment  within  the  discretion  of  the  court 
or  jury  fixing  the  punishment.  And  the  principal  offenders  and 
the  aiders  and  abettors  may  be  charged  in  the  same  count,  and 
separate  offenses  may  be  charged  in  separate  counts  of  the  same 
indictment  or  information,  and  be  tried  together. 

History.  S.  L.  1913,  p.  34,  Sec.  14;  Sec.  4180  C.  O.  S.  1921. 


58 


Moth erse Air,  Bank  Commv  v. 


107.  False  Entry — Penalty.  Every  officer,  director,  employee 
or  agent  of  any  bank,  who  makes  any  false  entry  in  any  book,  re¬ 
port  or  statement  of  the  bank,  with  intent,  in  either  case,  to  injure 
or  defraud  the  bank  or  any  other  person,  firm  or  corporation,  or 
to  deceive  any  officer  of  the  bank,  or  the  Bank  Commissioner,  or 
any  agent  appointed  to  examine  the  affairs  of  any  such  bank; 
and  any  person  who,  with  like  intent,  aids  or  abets  any  such  officer, 
director*  employee  or  agent  to  violate  this  section,  shall  be  deemed 
guilty  of  a  felony,  and  upon  conviction  shall  be  punished  by  a  fine 
not  exceeding  ten  thousand  dollars  and  by  imprisonment  in  the 
penitentiary  for  a  period  not  less  than  five  years  nor  more  than 
twenty-five  years.  And  the  principal  offenders  and  aiders  and  abet¬ 
tors  may  be  charged  in  the  same  count,  and  separate  offenses  may 
be  charged  in  separate  counts  of  the  same  indictment  or  information 
and  be  tried  together. 

History.  S.  L.  1913,  p.  35,  Sec.  15;  4181,  C.  O.  S.  1921.  Amended  by 
Sec,  3,  C.  135,  L.  1923. 

108.  Disposal  of  Funds  to  Cause  Insolvency.  Every  officer, 
director,  employee  or  agent  of  any  bank  who  shall  wilfully  dispose 
of  any  of  the  moneys,  funds,  credits  or  securities  of  such  bank,  or 
make,  or  counsel,  or  aid  in  making,  or  in  causing  such  bank  to  make 
any  contract  or  agreement,  the  effect  of  which  would  be  to  reduce 
the  value  of  the  assets  of  said  bank,  or  increase  the  liabilities  or 
indebtedness  of  said  bank,  with  the  intent,  in  either  case,  to  ac¬ 
complish  or  to  aid  in  accomplishing  the  insolvency  of  such  bank, 
and  thereby  to  injure  or  defraud  said  bank  or  any  other  person, 
firm,  or  corporation,  or  to  cause  the  depositors  of  said  bank  to  be 
paid  out  of  the  Guaranty  Fund,  or  from  other  funds,  or  by  other 
securities  or  means  than  the  money,  funds,  credits,  and  securities 
of  said  bank ;  and  any  person  aiding  any  such  officer,  director,  em¬ 
ployee  or  agent  to  violate  this  section,  shall  be  deemed  guilty  of 
a  felony,  and  upon  conviction  shall  be  punished  by  a  fine  not  ex¬ 
ceeding  five  thousand  dollars,  and  by  imprisonment  not  less  than 
five  years  nor  more  than  twenty-five  years,  and  any  wilful  viola¬ 
tion  of  any  of  the  orders,  rules,  or  requirements  of  the  Banking 
Board,  or  of  the  Bank  Commissioner;  or  of  any  agent  appointed  to 
examine  the  affairs  of  such  bank,  or  any  law  relative  to  the  conduct 
of  banks,  by  any  such  officer,  director,  employee,  or  agent  of  such 
bank,  shall  be  prima  facie  evidence  of  his  intention  to  accomplish 
such  fraudulent  insolvency  of  said  bank.  And  the  principal  of¬ 
fenders,  aiders  and  abettors  may  be  charged  in  the  same  count,  and 
separate  offenses  may  be  charged  in  separate  counts  of  the  same 
indictment  or  information,  and  be  tried  together. 

History.  S.  L.  1913,  p.  35,  Sec.  16;  Sec.  4182  C.  O.  S.  1921.  Amended 
Sec.  4,  C.  135,  L.  1923. 

A  bank  officer  who  wilfully  disposes  of  its  assets,  which  reduces  the 
value  thereof  with  intent  to  accomplish  insolvency  is  guilty  of 
felony. 

Appleget  vs.  State  242  Pac.  1056. 


\  iolation  of  Bank  Laws 


59 


109.  Issuing  False  Draft  or  Cceck.  Every  officer,  director 
employee  or  agent  of  any  bank,  who  shall,  with  intent  to  defraud' 
knowingly  issue  any  check,  bill  of  exchange,  draft  or  other  order 
tor  the  payment  of  money,  upon  or  against  any  bank,  without  first 
having,  with  such  bank,  money  sufficient  for  its  payment,  or  who, 
with  intent,  falsely  makes,  forges  or  alters  any  check,  bill  of  ex- 
change,  draft  or  other  order  for  the  payment  of  money,  purporting 
to  be  drawn  upon  or  against  any  bank,  or  who  shall,  with  like  in¬ 
tent,  knowingly  pass,  utter,  publish,  or  sell  or  knowingly  attempt 
to  pass,  utter,  publish,  or  sell  any  check,  bill  of  exchange,  draft, 
01  other  order  for  the  payment  of  money,  drawn  upon  or  against 
any  bank,  with  which  the  drawer  has  not  moneys  sufficient  for 

its  payment,  or  any  such  falsely  made,  forged  or  altered  check, 

^  exchange,  draft  or  other  order  for  the  payment  of  money, 

?  deeded  guilty  of  a  felony,  and  upon  conviction  be  pun- 

is  ed  by  a  fine  of  not  less  than  one  hundred  dollars  nor  more  than 
five  thousand  dollars,  or  by  imprisonment  for  not  less  than  one 
year  nor  more  than  five  years,  or  by  both  such  fine  and  imprison¬ 
ment.  And  the  principal  offenders  and  aiders  and  abettors  may  be 
chai  ged  in  the  same  count,  and  separate  offenses  may  be  charged 

m  separate  counts  of  the  same  indictment  or  information  and  be 
tried  together. 

History.  S.  L.  1913,  p.  36,  Sec.  17;  Sec.  4183  C.  O.  S.  1921. 

110.  Loan  of  Funds  Without  Consent  of  Board  of  Directors,  to 
Person  or  Partnership  in  Which  Banker  Interested.  Every  officer, 
director,  employee  or  agent  of  any  bank  who  shall,  without  having 
t  e  written  authority  or  consent  of  all  of  the  board  of  directors 
of  such  bank,  loan  or  advance  any  of  the  funds  of  the  bank  with 
which  he  is  officially  connected,  to  any  person,  firm,  company  or 
corporation  with  which  he  is  associated  in  business,  either  directly 
or  indirectly,  shall  be  guilty  of  a  felony,  and  upon  conviction  there¬ 
of,  shall  be  punished  by  a  fine  not  less  than  one  hundred  dollars  nor 
to  exceed  one  thousand  dollars,  or  by  imprisonment  in  the  peniten¬ 
tiary  not  less  than  one  year  nor  to  exceed  three  years ;  or  by  both 
such  fine  and  imprisonment.  And  the  principal  offenders  and 
aiders  and  abettors  may  be  charged  in  the  same  count.  Separate 
offenses  may  be  charged  in  separate  counts  of  the  same  indictment 
or  information,  and  be  tried  together. 

History.  S.  L.  1913,  p.  37,  Sec.  18:  Sec.  4184  C.  O.  S.  1921. 

HL  False  Statements  Relating  to  Banks — Punishment.  Every 
person  who  shall  publish,  utter,  or  circulate  any  false,  malicious 
unprivileged  statement  or  representation  for  the  purpose  of  injur¬ 
ing  any  banking  association  chartered  and  existing  under  and  by 
vii  tue  of  the  laws  of  the  State  of  Oklahoma,  shall  be  guilty  of  a 
felony,  and,  on  conviction,  shall  be  punished  by  a  fine  not  less  than 


60 


Mothersead,  Bank  Commv  v. 


one  hundred  dollars  nor  more  than  one  thousand  dollars,  or  im¬ 
prisonment  in  the  penitentiary  not  less  than  one  year  nor  more  than 
five  years,  or  by  both  such  fine  and  imprisonment. 

History.  S.  L.  1913,  p.  38,  Sec.  19;  Sec.  4185  C.  O.  S.  1921. 

112.  Destruction  or  Concealment  of  Bank  Records.  Every 
officer,  director,  employee  or  agent  of  any  bank  who  for  the  pur¬ 
pose  of  concealing  any  fact  or  suppressing  evidence  against  him¬ 
self  or  other  persons,  abstracts,  removes,  destroys,  or  secrets  any 
papers,  books,  or  records,  of  any  bank  from  such  bank,  or  the  house 
in  which  such  bank  carries  on  its  business,  or  from  the  custody  of 
the  Bank  Commissioners  or  the  Banking  Board,  shall  be  guilty  of  a 
felony  and  on  conviction  thereof  shall  be  fined  in  any  sum  not  less 
than  one  hundred  dollars  and  not  to  exceed  one  thousand  dollars, 
and  imprisonment  in  the  penitentiary  not  less  than  one  year  and  not 
to  exceed  three  years.  And  the  principal  offenders  and  aiders  and 
abettors  may  be  charged  in  the  same  count,  and  separate  offenses 
may  be  charged  in  separate  counts  of  the  same  indictment  or  inform¬ 
ation,  and  be  tried  together. 

History.  S.  L,.  1913,  p.  38,  Sec.  20;  Sec.  4186  C.  O  .S.  1921. 

113.  Corruption  or  Neglect  by  Commissioner  A  Felony.  Any 

bank  commissioner  or  assistant  bank  commissioner  who  shall  ne¬ 
glect  to  perform  any  duty  herein  provided  for,  or  who  shall  make 
any  false  statement  concerning  any  bank,  or  who  shall  be  guilty  of 
any  misconduct  or  corruption  in  office,  shall,  upon  conviction  there¬ 
of,  be  deemed  guilty  of  a  felony,  and  punished  in  the  manner  herein 
provided,  and  in  addition  thereto  shall  be  removed  from  office. 

History.  R.  L.  341;  S.  L.  1907-8,  p.  144;  Sec.  4233,  C.  O.  S.  1921. 

Punishment  under  this  section  is  fixed  under  Sec.  4139  C.  O.  S.  1921. 

State  vs.  Dennis  (Ok.  Cr.)  230  Pac.  935. 

114.  County  Attorneys  to  Enforce  Law.  It  shall  be  the  duty 

of  the  bank  commissioner  to  inform  the  county  attorney  of  the 
county  in  which  the  bank  is  located  of  any  violation  of  any  pro¬ 
vision  of  this  chapter  constituting  a  misdemeanor  or  felony,  by 
the  officers,  owners  or  employees  of  any  bank;  and  upon  receipt 
of  such  information  the  county  attorney  shall  institute  proceed¬ 
ings  to  enforce  the  provisions  of  this  chapter. 

History.  R.  L.  342;  S.  L.  1907-8,  p.  144;  Sec.  4234  C.  O.  S.  1921. 

Punishment  under  this  statute  construed  with  4233  C.  O.  S.  1921  and 

fixed  under  4139  C.  O.  S.  1921. 

State  vs.  Dennis  (Okla.  Cr.)  230  Pac.  935. 

114-a.  Penalty  for  Violations.  Every  banker,  officer,  em¬ 
ployee,  director  or  agent  of  any  bank  who  shall  neglect  to  perform 
any  duty  required  by  this  chapter,  or  who  shall  fail  to  conform  to 
any  lawful  requirements  made  by  the  bank  commissioner,  shall  be 
deemed  guilty  of  a  felony,  and  upon  conviction  thereof  shall  be 


Trust  Companies 


61 


punished  by  a  fine  not  to  exceed  one  thousand  dollars,  or  by  im¬ 
prisonment  in  the  penitentiary  not  to  exceed  five  years,  or  by  both 
such  fine  and  imprisonment. 

History.  Sec.  4139,  C.  O.  S.  1921,  R.  L.  282;  1907-8,  p.  135. 

This  section  fixes  punishment  for  violation  of  Sec.  4233  C.  O.  S  1921 
Sec.  113. 

State  vs.  Dennis  (Ok.  Cr.)  230  Pac.  935. 

TRUST  COMPANIES 

Section  1.  That  Section  4190,  Article  IV,  Chapter  24,  Com¬ 
piled  Oklahoma  Statutes  1921,  is  hereby  amended  to  read  as  fol¬ 
lows  : 

“  Section  4190.  Any  five  (5)  or  more  persons  who  shall  have 
associated  themselves  by  articles  of  agreement  in  writing,  as  pro¬ 
vided  by  law,  for  any  of  the  purposes  included  under  Section  4194, 
of  Article  IV,  Chapter  24,  Compiled  Oklahoma  Statutes,  1921,  may 
be  incorporated  under  any  name  or  title  designating  such  business. 
The  articles  or  agreement  shall  set  out: 

“First.  The  corporate  name  of  the  proposed  corporation, 
which  shall  not  be  the  name  of  any  other  corporation  heretofore 
incorporated  in  this  State  for  similar  purposes,  or  any  imitation 
of  such  name. 

“Second.  The  name  of  the  city  or  town  and  county  in  which 
the  corporation  is  to  be  located. 

“Third.  The  amount  of  the  capital  stock  of  the  corporation 
authorized  by  the  Articles  of  Agreement,  the  number  of  shares 
into  which  it  is  divided,  the  amount  of  capital  stock  actually  sub¬ 
scribed  in  good  faith  at  the  time  of  the  filing  of  said  Articles,  which 
shall  be  in  cities  and  towns  of  ten  thousand  (10,000)  or  less  popu¬ 
lation,  twenty-five  Thousand,  ($25,000.00)  Dollars,  and  in  cities 
and  towns  of  more  than  ten  thousand  (10,000.00);  and  not  more 
than  twenty-five  thousand  (25,000)  population,  the  same  shall  be 
not  less  than  One  Hundred  Thousand  ($100,000.00)  Dollars,  and  in 
all  cities  of  more  than  twenty-five  thousand  (25,000)  population, 
the  same  shall  be  not  less  than  Two  Hundred  Thousand  ($200,000.- 
00)  Dollars,  and  said  Articles  shall  further  state  that  the  capital 
so  subscribed  has  been  actually  paid  up  in  lawful  money  of  the 
United  States  and  is  in  the  custoy  of  the  persons  named  as  the  first 
board  of  directors  or  managers. 

“Fourth.  The  name  and  place  of  residence  of  the  several 
shareholders,  and  the  number  of  shares  subscribed  by  each. 

“Fifth.  The  names  of  the  board  of  directors  or  managers  and 
the  names  of  those  agreed  upon  for  the  first  year. 


62 


Moth erse ad,  Bank  Comm.,  v. 


‘ 1  Sixth.  The  number  of  years  the  corporation  is  to  continue, 
which  shall  be  fifty  (50)  years,  or  may  provided  that  the  existence 
of  the  corporation  shall  continue  until  the  corporation  shall  be 
dissolved  by  consent  of  the  stockholders  or  by  proceedings  institut¬ 
ed  by  the  State  under  any  statute  now  in  force  or  herefater  enacted. 

“  Seventh.  The  purpose  for  which  the  company  or  associa¬ 
tion  is  formed ;  provided,  no  trust  company  shall  become  a  body 
corporate  unless  approved  by  the  Banking  Board  as  provided  by 
law  for  State  Banks.’ ’ 

History.  Senate  Bill  227,  C.  56  S.  L».  1925,  amending  S.  L.  1910-11,  p. 

85,  R.  L.  308. 

116.  Liability  of  Shareholders.  The  shareholders  of  trust  com¬ 
panies,  organized  and  doing  business  under  this  law,  shall  be  addi¬ 
tionally  liable  for  an  amount  equal  to  the  stock  owned. 

History.  S.  L.  1910-11,  p.  85,  Sec.  2;  4191  C.  O.  S.  1921. 

Note:  This  Section  appears  to  be  included  in  Section  13,  S.  B.  227; 

S.  Jj.  1925,  but  appears  not  to  have  been  repealed. 

117.  Same— Acknowledgment  and  Filing.  The  articles  of 
agreement  shall  be  signed  and  acknowledged  by  the  parties  thereto 
and  recorded  in  the  office  of  the  recorder  of  deeds  of  the  county 
in  which  the  corporation  is  to  be  located,  and  a  certified  copy  of  such 
recorded  instrument  shall  be  filed  in  the  office  of  the  secretary  of 
state. 

History.  R.  L.  309;  S.  L.  1901,  p.  88;  C.  O.  S.  1921,  Sec.  4192. 

Section  2, 118.  That  Section  4193,  Article  IV,  Chapter  24,  Com¬ 
piled  Oklahoma  Statutes,  1921,  is  hereby  amended  to  read  as  fol- 
lows : 

“Section  4193.  The  secretary  of  state  shall  thereupon  give  a 
certificate  setting  forth  that  such  corporation  has  been  duly  organ¬ 
ized  and  the  amount  of  its  authorized  and  subscribed  capital,  and 
such  certificates  shall  be  taken  by  all  the  Courts  of  this  state  and 
other  places  as  evidence  of  the  corporate  existence  of  such  corpora¬ 
tion.  The  persons  so  acknowledging  such  articles  of  association 
and  their  associates  and  successors  shall,  for  the  period  as  provided 
in  the  articles  of  association,  under  the  certificate  issued  by  the 
secretary  of  state,  be  a  body  corporate,  and  by  such  name  they  and 
their  successors  shall  be  entitled  to  have,  possess  and  enjoy  all  the 
rights  and  privileges  conferred  by  law  upon  corporations,  subject 
to  the  provisions  of  this  article.” 

Histoiy.  Senate  Bill  227  C.  56,  S.  L.  1925,  amending  Sec.  4193,  C.  O. 

S.  1921;  R.  L.  Sec.  310:  S.  L.  1901,  p.  89. 

119.  Purposes  for  Which  Trust  Companies  May  Be  Formed. 

Corporations  may  be  created  under  this  article  for  any  one  or  more 
of  the  following  purposes: 


Trust  Companies 


63 


First.  To  receive  money  in  trust  or  on  general  deposit  with  or 
without  interest,  as  may  be  agreed  upon,  and  to  accept  and  receive 
savings  accounts  and  the  payment  to  them  or  their  order  of  de¬ 
posits  made  by  minors  shall  be  binding  on  them ;  to  receive  upon 
deposit  for  safe  keeping  personal  property  of  every  description; 
to  guarantee  special  deposits,  and  to  own  or  control  safety  vaults 
and  rent  boxes  therein. 

Second.  To  accept  and  excute  all  such  trusts  and  perform 
such  duties  of  every  description  as  may  be  committed  to  them  by 
any  person  or  persons  whatsoever,  or  any  corporation,  and  act  as 
assignee,  receiver,  trustee  and  depository,  and  to  accept  and  ex¬ 
ecute  all  such  trusts  and  perform  such  duties  of  every  description 
as  may  be  committed  or  transferred  to  them  by  order,  judgment 
or  decree  of  any  of  the  courts  of  record  of  this  state  or  of  any  state 
or  of  the  United  States. 

Third.  To  take,  accept  and  hold  by  the  order,  judgment  or 
decree  of  any  court  of  this  state,  or  of  any  state  or  territory  of 
the  United  States,  or  by  gift,  grant,  assignment,  transfer,  devise  or 
bequest  of  any  person  or  corporation,  any  real  or  personal  prop¬ 
erty  in  trust,  and  to  execute  and  perform  any  and  all  such  legal 
and  lawful  trusts  in  regard  to  the  same  upon  the  terms,  conditions, 
limitations  and  restrictions  which  may  be  declared,  imposed,  es¬ 
tablished  or  agreed  upon  by  such  order,  judgment,  decree,  gift, 
grant,  assignment,  transfer,  devise  or  bequest,  and  to  execute  as 
principal  or  surety,  and  to  guarantee  against  loss  any  principal 
or  surety  upon  any  bond  or  bonds  required  by  law  to  be  given  in  any 
proceeding  in  law  or  equity  in  any  of  the  courts  of  this  State,  or 
other  state  or  of  the  United  States. 

Fourth.  To  act  as  agent  or  attorney  in  fact  for  any  person 
or  corporatio  ni  nthe  management  and  control  of  real  or  personal 
property  and  the  sale  or  conveyance  of  the  same,  and  for  the  invest¬ 
ment  of  money,  and  to  act  for  and  represent  corporations,  or  per¬ 
sons  under  power  and  letters  of  attorney,  and  as  agents  for  persons 
and  corporations  for  the  purpose  of  issuing,  registering,  transfer- 
ing  or  countersigning  the  certificates  of  stock,  bonds  or  other  evi¬ 
dence  of  debt  of  any  corporation,  association,  municipality,  state 
or  public  authority,  on  such  terms  as  may  be  agreed  upon. 

Fifth.  To  accept  from  and  execute  trusts  for  married  women 
in  respect  to  their  separate  property,  whether  real  or  personal,  and 
act  as  agent  for  them  in  the  management  of  such  property,  and 
generally  to  have  and  exercise  such  powers  as  are  usually  had  and 
exercised  by  trust  companies. 

Sixth.  To  act  as  executor  under  last  will  or  at  the  instance 
of  any  person  entitled  to  any  administration  or  guardianship  of 
any  estate,  as  administrator  of  the  estate  of  any  deceased  per- 


64  Moth erse ad,  Bank  Comm.,  v. 

son,  or  guardian  or  curator  of  any  infant,  insane  person,  idiot  or 
habitual  drunkard,  or  trustee  for  any  convict  in  the  penitentiary 
uftder  the  appointment  of  any  court  of  record  having  jurisdiction 
of  the  person  or  estate  of  such  deceased  person,  infant,  insane  per¬ 
son,  idiot,  habitual  drunkard  or  convict. 

Seventh.  To  guarantee  the  fidelity  and  diligent  performance 
of  their  duty  of  persons  or  corporations  holding  places  of  public 
or  private  trust;  to  guarantee  or  become  surety  on  any  bond  given 
by  any  person  or  corporation  and  to  reinsure  or  guaranntee  any  per¬ 
son  or  corporation  against  loss  or  damage  by  reason  of  any 
risk  assumed  by  insuring  the  fidelity  or  diligent  performance  of 
duty  of  any  such  person  or  corporation,  or  by  guaranteeing  or  be¬ 
coming  surety  on  any  bond ;  to  guarantee  the  principal  or  interest,  or 
both,  of  any  securities  of  any  kind,  and  to  certify  and  guarantee 
titles  to  real  estate. 

Eighth.  To  loan  money  upon  real  estate  and  collateral  se¬ 
curity,  and  execute  and  issue  its  notes  and  debentures  payable  at 
a  future  date,  and  to  pledge  its  mortgages  on  real  estate  and  other 
securities  as  security  therefor,  which  notes  and  debentures  may 
be  issued  to  an  amount  not  exceeding  in  the  aggregate,  ten  times 
the  amount  paid  up  on  the  capital  stock  of  the  company  issuing 
the  same,  and  shall  in  no  case  exceed  the  amount  of  the  first  mort¬ 
gages  pledged  to  secure  their  payment. 

Ninth.  To  buy  and  sell  the  bonds  and  warrants  of  this  state, 
and  all  other  kinds  of  government,  state  or  municipal,  bonds,  and 
all  kinds  of  negotiable  and  non-negotiable  paper,  stocks,  and  other 
investment  securities. 

History.  Sec.  4194  C.  O.  S.  1921;  R.  L.  311;  S.  L.  7905,  p.  150. 

120.  Section  3.  In  addition  to  the  powers  and  authority  conferred 
on  the  trust  companies  in  this  state,  there  are  hereby  expressly 
conferred  the  following  additional  powers,  to-wit: 

“First.  To  act  as  fiscal  agent  of  the  United  States,  or  any 
state,  municipality,  body  politic  or  corporation,  and  in  such  capa¬ 
city  to  receive  and  disburse  money,  credits,  securities  and  effects. 

“Second.  To  discount  and  negotiate  promissory  notes,  drafts, 
bills  of  exchange  and  other  evidence  of  debt,  buy  and  sell  coin  and 
bullion,  to  accept  for  payment  at  a;  future  date,  drafts,  drawn  upon 
it  by  its  customers,  and  to  issue  letters  of  credit,  authorizing  the 
holders  thereof  to  draw  drafts  upon  it  or  upon  its  correspondents 
at  sight  or  on  time  not  exceeding  one  (1)  year;  provided,  that 
no  trust  company  shall  incur  liabilities  under  this  subdivision  to 
an  amount  equal  at  any  time  in  the  aggregate  to  more  than  its  paid 
up  and  unimpaired  capital  stock  and  surplus  fund,  except  with 
the  approval  of  the  Bank  Commissioner  under  such  general  regula¬ 
tions  as  to  amount  of  acceptances  as  the  Commissioner  may  pre¬ 
scribe. 


Trust  Companies 


65 

“Third.  To  act  as  trustee,  and  that  said  trusts  created  by  will 
or  by  declaration  of  trust,  may  be  created  for  a  period  not  exceed¬ 
ing  the  life  or  lives  of  the  beneficiaries  therein,  and  for  a  period 
of  twenty-one  (21)  years  thereafter,  and  no  provisions  of  any  law 
heretofore  or  hereafter  adopted,  relating  to  express  trusts,  shall 
apply  to  the  corporations  incorporated  under  the  provisions  of  this 
chapter,  unless  made  specifically  applicable  thereto. 

“Fourth.  Any  trust  company  organized  under  the  provisions 
of  this  chapter  shall  have  the  power  to  act  as  guardian  for  any 
number  of  persons,  and  no  law  heretofore  or  hereafter  enacted 
with  reference  to  the  number  of  persons  for  whom  a  person  or  cor¬ 
poration  may  act  as1  guardian  shall  apply  to  trust  companies  organ¬ 
ized  under  the  provisions  of  this  chapter,  unless  expressly  made 
applicable  thereto. 

“Fifth.  That  the  provisions  of  Chapter  16,  Session  Laws  of 
Oklahoma,  1919,  insofar  as  they  conflict  with  the  provisions  of 
this  Act,  are  hereby  repealed. 

“Sixth.  That  the  provisions  of  Section  1432,  Article  XIV, 
Chapter  5,  Compiled  Oklahoma  Statutes,  1921,  insofar  as  they 
conflict  with  the  provisions  of  this  Act,  are  hereby  repealed.” 

History.  Senate  Bill  227,  C.  56,  S.  L.:  1925.  (Additional  powers  are  con¬ 
ferred  in  this  Section). 

Note:  The  Fifth  Sub-division  makes  Chapter  16  S.  L.  1919  inappli¬ 

cable  to  trust'  companises.  Chapter  16  deals  with  common  law  trusts. 
The  Sixth  Sub-division,  making  Section  1432  inapplicable  to  trust 
companies  gives  trust  companies  under  this  law  the  right  to  act  as 
guardian  of  any  number  of  minors.  Section  1432  was  enacted  to  pre¬ 
vent  guardians  of  wards  from  handling  the  estate  of  more  than  five 
wards. 

121.  Capital  Stock — Directors.  One-half  of  the  capital  stock 
actually  subscribed  must  be  paid  in  cash  when  articles  are  filed  and 
the  remainder  within  six  months  thereafter,  which  fact  must  be  cer¬ 
tified  without  delay  by  the  president  and  secretary  of  such  company 
to  the  secretary  of  state ;  and  the  amount  of  capital  authorized  by 
such  articles  shall  not  be  more  than  ten  millions  of  dollars.  The 
property  or  business  of  the  corporation  shall  be  controlled  and  man¬ 
aged  by  directors,  not  less  than  five  nor  more  than  twenty-five  in 
number,  who  shall  be  stockholders  of  such  corporation,  to  be  elected 
by  ballot  by  the  shareholders  of  such  corporation  for  one  year,  if 
the  number  of  directors  of  such  corporation  does  not  exceed  five, 
at  such  time  and  place  as  shall  be  directed  by  the  by-laws  of  such 
corporation,  of  which  time  and  place  at  least  two  weeks  notice  shall 
be  published  in  some  newspaper  published  at  least  once  a  week  in  the 
city  or  county  in  which  the  corporation  is  located,  and  if  there  be  no 
newspaper  published  in  such  county,  then  in  any  paper  pub¬ 
lished  in  this  state  which  circulates  in  the  locality  where  such  cor¬ 
poration  is  located.  Such  election  shall  be  made  by  such  of  the 


66 


Mothersead,  Bank  Comm.,  v. 


shareholders  as  shall  attend  in  person  or  by  proxy  in  writing.  In 
case  the  election  shall  not  be  made  on  the  day  named,  the  said  cor¬ 
poration  shall  not  thereby  be  dissolved,  but  an  election  may  be 
had  at  any  other  time  agreeable  to  the  by-laws  of  said  corporation, 
and  the  persons  so  elected  shall  hold  their  office  until  others  are 
elected  and  qualified.  If  the  number  of  directors  of  such  corpor¬ 
ation  named  in  the  articles  of  association  shall  exceed  five  in  num¬ 
ber,  they  shall,  as  soon  as  may  be  after  their  organization,  divide 
themselves  by  ballot  into  three  classes  of  equal  number  as  near  as 
may  be,  designated  the  first,  second  and  third  class,  of  which  the 
first  class  shall  remain  in  office  one  year,  the  second  class  two  years, 
and  the  third  class  three  years ;  and  at  each  annual  election  conduct¬ 
ed  in  the  manner  hereinbefore  designated,  directors  shall  be  elected 
for  the  term  of  three  years  to  fill  the  vacancies  created  by  the  retir¬ 
ing  class.  In  case  of  death  or  resignation  of  one  or  more  of  said 
directors,  the  survivors  shall  fill  the  vacancy  until  the  next  elec¬ 
tion. 

History.  Sec.  4196,  C.  O.  S.  1921;  R.  L.  313;  S.  L.  1901,  p.  92. 

122.  Investments — Dividends.  The  directors  of  corporations 
created  under  this  article  shall  have  power  of  investing  the  moneys 
placed  in  their  charge  in  loans  secured  by  real  estate  or  other  suffici¬ 
ent  collateral  security,  in  public  bonds  of  the  United  States  or  of  this 
or  any  other  state,  or  in  the  bonds  or  stocks  of  any  county  or 
school  district,  or  any  incorporated  city  or  town  in  this  or  any 
other  state.  Such  corporation  shall  own  only  such  real  estate 
as  may  be  required  for  the  transaction  of  its  businenss  and  such 
as  it  may  acquire  in  the  enforcement  and  collection  of  debts  or 
liabilities  due  to  it.  Dividends  of  the  profits  of  the  corporation 
may  be  declared  by  the  trustees  or  directors  thereof  every  six 
months,  or  oftener,  as  the  directors  may  elect;  but  no  such  divi¬ 
dends  shall  be  made  and  paid  to  the  stockholders  while  such  corpor¬ 
ation  is  in  a  ninsolvent  condition,  nor  shall  any  dividends  be  declared 
which  would  render  such,  corporation  insolvent ;  and  if  the  directors 
of  such  corporation  shall  knowingly  declare  and  pay  any  dividends 
when  the  corporation  is  insolvent,  or  any  dividend  the  payment  of 
which  would  render  it  insolvent,  they  shall  be  jointly  and  severally 
liable  for  all  debts  contracted  while  they  shall  respectively  con¬ 
tinue  in  office;  provided,  that  if  any  of  the  directors  shall  object  to 
the  declaring  of  such  dividends,  or  to  the  payment  of  the  same,  and 
shall  at  any  time  before  the  time  fixed  for  the  payment  thereof 
file  a  certificate  of  their  objections  in  writing,  with  the  clerk  of  the 
corporation  and  with  the  clerk  of  the  district  court  of  the  county, 
they  shall  be  exempt  from  the  said  liability. 

History.  Sec.  4197  C.  O.  S.  1921;  R.  L.  314;  S.  L.  1901,  p.  94. 

123.  Accounts  and  Reports— Penalty  for  Failure.  The  board 
of  directors  of  the  corporation  shall  keep  correct  accounts  of  their 


Trust  Companies 


07 


transactions,  and  have  full  statement  of  the  condition  of  the  affairs 
of  such  corporation  made  out  and  exhibited  to  the  stockholders  as 
often  as  once  in  each  year,  at  least  ten  days  before  the  day  of  elec¬ 
tion.  The  board  of  directors,  whenever  required  to  do  so  by  the  secre¬ 
tary  of  state,  and  within  fifteen  days  after  the  date  of  the  call  made 
by  him,  shall  also  furnish  a  statement,  the  form  of  which  shall  con¬ 
tain  such  particulars  as  the  said  secretary  may  prescribe,  of  the 
actual  condition  of  such  corporation  at  the  close  of  business  on  the 
day  designated,  and  which  day  shall  be  prior  to  such  call ;  said 
statement  to  be  filed  in  the  office  of  the  said  secretary.  Said  state¬ 
ment  shall  be  certified  under  oath  by  the  president  and  secretary 
(or  two  principal  officers)  of  such  corporation,  and  verified  by  the 
affidavits  of  three  of  the  directors  or  stockholders,  to  be  appointed 
by  the  board  for  the  purpose  of  making  an  examination  of  the  af¬ 
fairs  of  the  corporation,  which  will  qualify  them  personally  to  make 
the  sworn  statement  as  provided  below.  The  affidavits  appended 
shall  be  in  the  following  words : 


State  of  Oklahoma,  ss. 

County  of . 

We . ,  president,  and . - . 

secretary  of  the . ,  do  solemnly  swear  that  the 


above  statement  is  true  to  the  best  of  our  knowledge  and  belief. 


Subscribed  and  sworn  to  before  me  this . day  of 

Nineteen  Hundred  and . 

(Seal) 


We,  directors  (Stockholders)  of  the  . - . - . -- . 

do  solemnly  swear  that  we  have  made  thorough  personal  examina¬ 
tion  of  the  books,  papers,  property  and  affairs  of  said  corporation, 
and  that  the  above  statement  is  true  to  the  best  of  our  knowledge 
and  belief. 


Subscribed  and  sworn  to  before  me  this  . day  of 

Nineteen  Hundred  and . 

(Seal) 


History.  Sec.  4198  C.  O.  S.  1921;  R.  L.  315;  S.  L.  1901,  p.  94. 

124.  Summary  to  be  Published.  A  summary  of  the  statement 
required  shall  be  published  by  such  corporation  at.  least  once  in 
one  or  more  daily  newspapers  published  in  the  city  or  county 
where  it  is  located,  if  a  daily  newspaper  is  published  therein,  or 


68 


Mothersead,  Bank  Comm.,  v. 

in  a  weekly  newspaper  if  no  daily  is  published  in  such  place.  Should 
any  president,  secretary,  other  principal  officer  or  director  refuse 
to  make  the  statement  so  required  of  him  or  them,  and  within  the 
time  required,  or  wilfully  and  corruptly  make  a  false  statement, 
he  or  they  and  each  of  them  shall  be  deemed  guilty  of  a  misdemean¬ 
or,  and  upon  conviction  thereof,  upon  information,  they  shall  be 
punished  by  a  fine  for  each  offense  not  exceeding  five  hundred 
dollars,  or  by  imprisonment  not  less  than  one  or  more  than  twelve 
months  in  the  city  or  county  jail,  or  by  both  such  five  and  im¬ 
prisonment. 

History.  Sec.  4199  C.  O.  S.  1921;  R.  L.  316:  S.  L.  1901,  p.  96. 

125.  Failure  to  be  Prosecuted.  It  shall  be  the  duty  of  the 
secretary  of  state  within  sixty  days  from  the  date  of  every  call, 
to  report  to  the  prosecuting  attorneys  of  the  counties  in  which  such 
corporations  may  be  located  the  names  of  all  corporations  that 
have  failed  to  file  in  his  office  within  the  prescribed  time,  the 
statement  herein  required,  and  it  shall  be  the  duty  of  each  prose¬ 
cuting  attorney  to  whom  such  report  is  made  immediately  to 
institute  proceedings  for  the  enforcement  of  the  penalties  in  this 
article  provided. 

History.  Sec.  4200  C.  O.  S.  1921;  R.  L.  317;  S.  L.  1901,  p.  96. 

126 — Section  4.  Property  or  securities  held  by  a  trust  com¬ 
pany  in  any  fiduciary  capacity  shall  be  a  special  deposit  in  such 
trust  company,  and  the  accounts  thereof  shall  be  kept  separate 
from  each  other,  and  separate  from  the  company’s  general  busi¬ 
ness.  Such  property  or  securities  held  in  trust  shall  not  be  mingled 
with  the  investments  of  the  capital  stock  or  other  property  be¬ 
longing  to  such  trust  company,  or  be  liable  for  the  obligations 
thereof.  For  the  purpose  of  this  Section,  such  corporation  shall 
have  a  trust  department,  in  which  all  the  trust  business  of  said 
corporation  shall  be  kept  separate  and  distinct  from  its  general 
business. 

History.  Senate  Bill  227  C.  56,  S.  L.  1925. 

127.  Stock  Held  by  Fiduciary  or  as  Security.  No  person  hold¬ 
ing  stock  in  the  corporation  as  executor,  administrator,  guardian 
or  trustee,  and  no  person  holding  such  stock  as  collateral  security, 
shall  be  personally  subject  to  any  liability  as  stockholder  in  such 
corporation,  but  the  person  pledging  such  stock  shall  be  consid¬ 
ered  as  holding  the  same,  and  shall  be  liable  as  stockholder  accord¬ 
ingly;  and  the  estate  and  funds  in  the  hands  of  such  executors, 
administrators,  guardians  or  trustees  shall  be  liable  in  like  manner 
and  to  the  same  extent  as  the  testator  or  intestate,  or  the  ward  or 
person  interested  in  such  trust  fund,  would  have  been  if  he  had  been 
living  and  competent  to  act  and  hold  the  same  stock  is  his  own 
name. 

History.  Sec.  4201  C.  O.  S.  1921;  R.  L.  318;  S.  L.  mi,  p.  97. 


Trust  Companies 


69 


128.  Same — How  Voted.  Every  such  executor,  administra¬ 
tor,  guardian  or  trustee  shall  represent  the  shares  of  stock  in  his 
hands  at  all  meetings  of  the  corporation,  and  may  vote  accordingly 
as  a  shareholder,  and  every  person  who  shall  pledge  his  stock  as 
aforesaid,  may,  nevertheless,  represent  the  same  at  such  meetings, 
and  may  vote  accordingly  as  a  shareholder. 

History.  4202  C.  O.  S.  1921;  R.  L.  319;  S.  L.  1901,  p.  97. 

129.  Books  Open  For  Inspection.  The  books  and  all  records 
of  the  proceedings  of  such  corporation  shall  be  kept  open  for  in¬ 
spection  of  all  persons  interested. 

History.  Sec.  4203  C.  O.  S.  1921;  R.  L.  320;  S.  L.  1901,  p.  97. 

130.  Change  of  Capital  Stock.  Any  corporation  which  may 
hereafter  be  formed  for  any  of  the  purposes  contemplated  by  this 
article  may  increase  or  diminish  its  capital  stock  by  complying  with 
the  provisions  of  this  article,  in  any  amount  within  the  limits  of 
this  article,  and  may  also  extend  its  business  to  any  other  purposes 
authorized  by  this  article,  subject  to  the  provisions  and  liabilities 
thereof. 

History.  Sec.  4204  C.  O.  S.  1921;  R.  L.  321:  S.  L.  1901,  p.  97. 

131.  Same — Notice  of  Meeting.  Whenever  any  corporation 
organized  under  this  article  shall  desire  to  call  a  meeting  of  its 
stockholders  for  the  purposes  of  availing  itself  of  the  privileges  and 
provisions  of  this  article,  or  for  increasing  or  diminishing  the 
amount  of  its  capital  stock,  it  shall  be  the  duty  of  the  directors  to 
publish  a  notice  signed  by  at  least  a  majority  of  them,  in  a  news¬ 
paper  in  the  county  if  any  shall  be  published  therein,  at  least  sixty 
days,  and  to  deposit  a  written  or  printed  copy  thereof  in  the  post- 
office,  postage  prepaid,  addressed  to  each  stockholder  at  his  usual 
place  of  residence,  at  least  sixty  days  previous  to  the  day  fixed 
upon  for  holding  such  meeting,  specifying  the  object  to  the  meeting, 
the  time  and  place  when  and  where  such  meeting  shall  be  held 
and  the  amount  to  which  it  shall  be  extended  or  changed..  An  af¬ 
firmative  vote  of  the  persons  holding  the  larger  amount  in  value 
of  all  the  shares  of  stock  shall  be  necessary  to  increase  or  diminish 
the  amount  of  its  capital  stock.  The  notice  provided  for  in  this 
section  shall  be  published  at  least  once  a  week,  and  the  first  pub¬ 
lication  must  be  at  least  sixty  days  before  the  day  of  such  meet¬ 
ing. 

History.  Sec.  4205  C.  O.  S.  1921;  R.  L.  322;  S.  L.  1901,  p.  97. 

Nete:  This  Section  appears  to  thoroughly  comply  with  Section  39, 

Article  EX,  Constitution. 

132.  Same — Proceedings.  If,  at  the  time  and  place  specified 
in  the  notice  provided  for  in  the  preceding  section,  stockholders 
shall  appear  in  person  or  by  proxy,  in  number  representing  not  less 


70 


Mothersead,  Bank  Comm.,  v. 


than  a  majority  of  all  the  shares  of  stock  of  the  corporation,  they 
shall  organize  by  choosing  one  of  the  directors  chairman  of  the 
meeting,  and  a  suitable  person  for  secretary,  and  proceed  to  a  vote 
of-  those  present  in  person  or  by  proxy ;  and  if,  on  canvassing  the 
vote  it  shall  appear  that  a  sufficient  number  of  votes  has  been 
given  in  favor  of  increasing  or  diminishing  the  amount  of  capital, 
a  statement  of  the  proceedings,  showing  a  compliance  with  the 
provisions  of  this  article,  the  amount  of  capital  actually  paid  in,  the 
whole  amount  of  assets  and  liabilities  of  the  corporation  and  the 
amount  to  which  the  capital  stock  shall  be  increased  or  diminished, 
shall  be  made  out,  signed  and  verified  by  the  affidavit  of  the  chair¬ 
man  and  be  countersigned  by  the  secretary;  and  such  statement 
shall  be  acknowledged  by  the  chairman  and  a  certified  copy  of  such 
recorded  instrument  shall  be  filed  in  the  office  of  the  secretary 
of  state,  who  shall  thereupon  issue  a  certificate  that  such  corpora¬ 
tion  has  complied  with  the  law  made  and  provided  for  the  increase 
oi  decrease  of  capital  stock  as  the  case  may  be,  and  the  amount 
to  which  such  capital  stock  is  increased  or  decreased,  and  such 
certificate  shall  be  taken  in  all  courts  of  this  state  and  other  places 
as  evidence  of  such  increase  or  decrease  of  stock;  and  thereupon 
the  capital  stock  of  such  corporation  shall  be  increased  or  dimin¬ 
ished  to  the  amount  specified  in  such  certificate  and  the  corpora¬ 
tion  shall  be  entitled  to  the  privileges  and  provisions  and  be  sub¬ 
ject  to  the  liabilities  of  this  article. 

History.  Sec.  4206  C.  O.  S.  1921;  R.  L.  323;  S.  L.  1901,  p.  98. 

133.  Safety  Vault  Boxes — Non-Payment  of  Rent.  Any  cor¬ 
poration  which  has  been  authorized  to  own  or  control  a  safety- 
vault  and  rent  the  boxes  therein,  may,  if  the  amount  due  for  the 
use  of  any  safe  or  box  in  the  vault  of  such  corporation  shall  not 
have  been  paid  for  two  years,  at  the  expiration  thereof,  cause  to 
be  sent  to  the  person  in  whose  name  such  safe  or  box  stands  on  its 
books,  a.  notice  in  writing,  in  a  securely  closed  postpaid  registered 
letter,  directed  to  such  person  at  his  postoffice  address,  as  recorded 
upon  the  books  of  the  corporation,  notifying  such  person  that  if 
the  amount  then  due  for  the  use  of  such  safe  or  box  is  not  paid 
within  sixty  days  from  the  date  of  such  notice,  the  corporation  will 
then  cause  such  safe  or  box  to  be  opened  in  the  presence  of  its 
president,  vice  president,  secretary  or  treasurer,  and  of  a  notary- 
public  not  an  officer  or  in  the  employ  of  the  corporation,  and  the 
contents  thereof,  if  any,  to  be  sealed  up  by  such  notary  public 
m  a  package,  upon  which  such  notary  shall  distinctly  mark  the 
name  and  address  of  the  person  in  whose  name  such  safe  or  box 
stands  upon  the  books  of  the  corporation,  and  the  estimated  value 
j.  erfo:[;  the  package  so  sealed  and  addressed  when  marked 
tor  mdentification  by  such  notary  public  will  be  placed  by  such 
notary  public  in  one  of  the  general  safes  or  boxes  of  the  corporation 
and  retained  by  the  corporation,  subject  to  the  payment  of  all  rent 


Trust  Companies 


71 


that  may  be  unpaid  and  all  expenses  incurred  in  opening  the  safe 
or  box,  and  also  of  a  reasonable  compensation  for  the  safe  keeping 
of  the  contents  after  their  removal  from  the  safe  or  box. 

History.  Sec.  4195  C.  O.  S.  1921;  R.  L.  312;  S.  L.  1901,  p.  91. 

134.  Trust  Company  As  Fiduciary — Deposit  Required.  Any 

company  organized  under  this  article  shall  be  permitted  to  quali¬ 
fy  as  guardian,  curator,  executor,  administrator,  assignee,  receiver 
and  trustee,  either  by  deed,  will  or  judicial  appointment,  without 
giving  bond  as  such,  or  become  sole  guarantor  or  surety  in  or  upon 
any  bond  required  to  be  given  under  the  laws  of  this  state  and  to 
insure  the  fidelity  of  persons  holding  places  of  public  or  private 
trust;  provided,  that  such  company  shall  first  deliver  into  the  cus¬ 
tody  of  the  state  treasurer  a  deposit  of  fity  thousand  dollars,  con¬ 
sisting  of  cash  or  government,  county  or  municipal  bonds,  or  bonds 
or  warrants  of  the  State  of  Oklahoma,  or  notes  or  debentures  se¬ 
cured  by  first  mortgage  or  deed  of  trust  on  real  estate  situate  in  this 
state,  worth  at  least  double  the  amount  loaned  thereon,  or  rail¬ 
road,  electric  railroad  or  electric  light  bonds  secured  by  first  mort¬ 
gage  or  deed  of  trust  upon  all  property  and  franchises  of  such 
railroad,  electric  railroad  or  electric  light  company,  and  whose 
current  net  earnings  must  be  at  least  double  the  current  interest  on 
all  outstanding  bonds  secured  by  such  first  mortgage  or  deed  of 
trust,  or  such  other  first-class  securities  as  may  be  approved  there¬ 
for  by  the  bank  commissioner;  and  the  said  bonds  and  securities 
in  no  case  shall  be  accepted  above  their  par  value  nor  below  their 
market  value. 

History.  Sec.  4207  C.  O.  S.  1921;  R.  L.  324;  S.  L.  1905,  p.  151. 

135.  Bank  Commissioner  to  Examine  Securities.  Before  the 
said  securities  hall  be  accepted  the  bank  commissioner  shall  certify 
that  he  has  examined  the  same  and  that  they  are  worth  a  sum  to 
be  by  him  scheduled  in  such  certificate,  and  the  treasurer  shall 
thereupon  accept  the  same  at  the  appraisement  placed  thereon  by 
said  commissioner;  and  whenever  said  bank  commissioner  shall  ex¬ 
amine  any  such  trust  company  it  shall  be  his  duty  to  report  es¬ 
pecially  to  the  state  treasurer  on  the  value  of  the  securities  so  de¬ 
posited  with  said  treasurer,  and  if  it  is  found  at  any  time  that  said 
securities  have  become  depreciated  or  impaired,  he  shall  so  notify 
said  treasurer,  who  shall  require  additional  deposits  to  make  good 
any  impairment  or  depreciation ;  and  if  said  company  shall  fail 
within  twenty  days  to  make  good  any  such  depreciation,  it  shall  not 
be  permitted  to  carry  on  any  of  the  business  for  which  said  de¬ 
posits  are  required  for  indemnity,  while  so  in  default. 

History.  Sec.  4208  C.  O.  S.  1921;  R.  L.  325;  S.  L.  1905,  p.  152. 

136.  Securities  May  Be  Exchanged.  Upon  application  by  such 
company  and  upon  the  approval  of  the  said  bank  commissioner, 


Mothebsead,  Bank  Comm.,  v. 


securities  so  deposited  may  be  exchanged  from  time  to  time  for 
others  of  equal  value,  and  the  said  corporation  shall  in  all  cases 
pay  the  expenses  of  the  bank  commissioner  in  making  all  examina¬ 
tions  and  appraisals  upon  any  original  or  supplemental  deposit  of 
such  securities. 

History.  Sec.  4209  C.  O.  S.  1921;  R.  L.  326;  S.  L.  1905,  p.  151. 

13  f.  Amount  of  Deposit  Required.  The  amount  of  securities 
so  deposited  shall  in  no  case  be  less  than  one-half  the  annual  prem¬ 
iums  and  compensation  earned  by  such  company  during  the  pre¬ 
ceding  year  as  surety,  guarantor,  administrator,  executor,  curator 
and  receiver  and  trustee  in  this  state,  and,  whenever  one-half  the 
said  premium  and  compensation  shall  exceed  said  sum  of  fifty 
thousand  dollars  for  any  one  year,  additional  deposits  shall  be  re¬ 
quired  in  the  same  manner  as  hereinbefore  set  out,  to  keep  the 
same  equal  in  the  aggregrate  amount  to  one-half  such  premiums  and 
compensation  earned  during  the  preceding  year  and  such  com¬ 
panies  shall  on  or  before  the  tenth  day  of  January,  in  each  year, 
file  under  the  oath  of  one  of  its  prinicpal  officers,  a  statement 
showing  the  amount  of  such  receipts  for  the  preceding  year,  and 
shan  accompany  such  statement  with  any  additional  deposits  re¬ 
quired  as  herein  provided. 

History.  Sec.  4210  C.  O.  S.  1921;  R.  L.  327;  S.  L.  1905,  p.  152. 

138.  Treasurer  to  Issue  Certificate.  Upon  the  making  of  a 
i?l?i0Syk  with  the  state  treasurer  as  herein  provided,  the  treasurer 

shall  issue  a  certificate  to  the  effect  that  such  company  has  fully 
complied  with  the  laAv  and  is  entitled  to  act  in  the  various  capa¬ 
cities  herein  specified,  which  certificate  shall  be  sufficient  proof 
that  such  company  has  complied  with  the  terms  of  this  article. 

History.  Sec.  4211  C.  O.  S.  1921;  R.  L.  328;  S.  L.  1905,  p.  153. 

139.  Fund  Subject  to  Company’s  Liabilities.  The  fund  so  de¬ 
posited  with  the  treasurer  shall  be  primarily  liable  for  the  obliga¬ 
tions  of  such  company  as  surety,  guarantor,  curator,  executor,  ad¬ 
ministrator,  assignee,  receiver  and  trustee  as  aforesaid,  depository 
ot  money  m  court,  or  other  fiduciary  capacity,  until  all  liability  in¬ 
curred  by  said  company  shall  have  been  terminated,  and  in  the 
event  of  any  judgment  against  such  company  upon  any  such  obli¬ 
gations  becoming  final,  execution  may  be  issued  and  served  upon 
the  state  treasurer,  who  shall  deliver  to  the  officer  holding  such 
execution  sufficient  of  such  securities  to  satisfy  same,  to  be  sold 
and  disposed  of  in  the  manner  provided  for  by  law  for  the  sale 
o±  personal  property  upon  execution,  unless  at  the  time  of  service 
o  such  order  the  bank  commissioner  shall  advise  the  treasurer  of 
the  insolvency  of  such  company ;  in  which  case  the  treasurer,  un¬ 
der  the  direction  of  the  bank  commissioner,  shall  sell  and  deposit 


Trust  Companies 


73 


all  of  such  securities  or  deliver  the  same  to  any  receiver  of  such 
corporation,  to  be  held  as  a  fund  for  the  discharge  of  the  specific 
obligations  pro  rata,  for  which  the  same  were  deposited. 

History.  Sec.  4212  C.  O.  S.  1921;  R.  L.  329;  S.  L.  1905,  p.  153. 

140.  Additional  Deposit  May  Be  Required,  When.  The  treas¬ 
urer  shall  at  no  time  retain  any  security  with  interest  or  principal 
more  than  ninety  days  in  default,  but  shall  require  the  substitution 
of  others  in  their  place ;  and  at  any  time  when  any  judgment  shall 
have  been  recovered  against  any  such  company  upon  any  of  the  ob¬ 
ligations  for  which  such  fund  is  security,  whether  the  same  is  final 
or  appellate  proceedings  to  be  taken  therefrom,  it  shall  be  discre¬ 
tionary  with  the  bank  commissioner  to  require  an  additional  de¬ 
posit  equal  to  the  amount  of  such  judgment  or  judgments  and 
costs. 

History.  C.  O.  S.  1921,  Sec.  4213;  R.  L.  330:  S.  L.  1905,  p.  154. 

141.  Liability  of  Stockholder — Impairment  of  Capital. 

Section  13.  That  Section  4214,  Article  IV,  Chapter  24,  Com¬ 
piled  Oklahoma  Statutes,  1921,  is  hereby  amended  to  read  as  fol¬ 
lows  : 


“Section  4214.  Each  stockholder  of  a  company  organied  un¬ 
der  this  Article  shall  be  additionally  liable  for  the  amount  of  stock 
owned  by  him.  Whenever  it  shall  appear  to  the  Bank  Commissioner 
that  the  capital  of  any  such  company  has  become  impaired,  the 
Bank  Commissioner  shall  notify  such  company  to  make  such  im¬ 
pairment  good  within  sixty  (60)  days,  and  it  shall  be  the  duty  of 
the  officers  and  directors  of  such  company  receiving  such  notice 
from  the  Bank  Commissioner  to  immediately  call  a  special  meeting 
of  its  stockholders  for  the  purpose  of  levying  an  assessment  upon 
its  stockholders  sufficient  to  cover  the  impairment  of  its  captial 
stock ;  provided,  that  such  company,  if  not  insolvent,  may  reduce 
its  capital  stock  to  the  extent  of  such  impairment,  if  such  reduc¬ 
tion  will  not  place  its  capital  below  the  amount  required  by  this 
Chapter;  provided,  further,  that  the  company  shall  have  a  prior 
lien  upon  the  stock  of  every  individual  stockholder  to  the  extent 
of  such  assessment  and,  upon  the  failure  of  any  such  stockholder 
to  pay  the  assessment  authorized  by  this  Section  within  the  time 
fixed  by  the  Bannk  Commissioner  for  making  good  said  impair¬ 
ment,  said  lien  may  be  foreclosed  and  the  stock  of  such  delinquent 
stockholder  sold  by  giving  notice  of  the  time  and  place  of  said 
sale  and  of  the  stock  to  be  sold  by  advertisement  for  fifteen  (15) 
days  in  some  newspaper  of  general  circulation  published  in  the 
county  where  such  trust  company  is  located. 

History.  Senate  Bill  227  C.  56,  1925;  amending  Section  4214  C.  O.  S. 

1921;  R.  L.  331;  S.  L.  1901,  p.  100. 


74 


Mothersead,  Bank  Commv  v. 

142.  Insolvency  and  Liquidation. 

•i  ,Sau°?  12'  Jhat  Section  4215,  Article  IV,  Chapter  24,  Com¬ 
piled  Oklahoma  Statutes,  1921,  is  hereby  amended  to  read  as  fol- 
lows : 

“Section  4215.  Companies  organized  under  this  Article  shall 
be  subject  to  inspection  by  the  Bank  Commissioner  and  if,  upon 
examination  such  company  is  found  to  be  insolvent,  it  shall  be  the 
duty  ot  such  Bank  Commissioner  immediately  to  take  charge  of 
such  company  and  all  property  and  effects  thereof.  Upon  so  tak¬ 
ing  charge  the  Commissioner  shall  as  soon  as  possible  ascertain 
by  thorough  examination  into  its  affairs,  its  actual  financial  condi¬ 
tion,  and  whenever  he  shall  become  satisfied  that  such  company 
cannot  resume  business  or  liquidate  its  indebtedness  to  the  satis¬ 
faction  ot  all  its  creditors,  he  shall  proceed  to  liquidate  said  trust 
company  and  wind  up  its  affairs  in  the  same  manner  as  provided 
by  law  for  the  liquidation  of  State  Banks ;  provided,  that  the  inter¬ 
est  of  all  persons  in  the  assets  thereof  shall  be  as  herein  provided 
with  respect  to  the  trust  department  and  the  Commercial  Banking 
and  Savings  Department  thereof.  The  Bank  Commissioner  shall 
leceice  the  same  fees  for  his  services  as  provided  by  law,  to  be 

State*”  lnn  '0r  1'"6  serv*ces  l-01'  the  examination  of  banks  in  this 


H1*t°ry-  „  Senate  BiU  227-  c-  56-  1926.  amending  Sec. 
1921;  R.  L.  332;  S.  L.  1901,  p.  101. 


4215  C.  O. 


S. 


143.  May  Establish  Commercial  Bank. 

5'  ^at  Section  421 6’  Article  IV>  Chapter  24,  Corn- 
lows1-  °  '  a4lorna  Statutes,  1921,  is  hereby  amended  to  read  as  fol- 


Dw*  J  iv  V!16'  A1  tlust  comPanies  incorporated  under  the 
laws  of  this  State  are  Hereby  authorized  to  establish  a  commercial 

banking  and  savings  department,  in  which  they  shall  be  permitted 

o  receive  money  on  deposit,  with  or  without  interest,  including 

before Sp accol7nts,  trust  funds  and  sinking  funds;  provided,  that 

nrovided  *!?®t.comPa^  »  authorized  to  accept  deposits,  as  above 
p  ,  the  hoard  of  directors  of  such  trust  company  shall  by 

mercial'bankiuo  to  the  depositora  ™  said  con? 

“anTtal  stock f  an?/avmf  department,  set  aside  a  portion  of  the 

fasc  l  I  l  f  ^  tI?St  comPany.  the  amount  of  which  in  no 

ganizfa  State1  hS  an?olmt  of  capital  stock  required  to  or- 

nanv  is  loelw baik  1“rheitr  or  town  in  which  said  trust  com- 

with  the  Sta^R  Aieentlfied  C?Py  °f  said  resolutions  shall  be  filed 
n,v!!  +  St  t  „  Ba”k  Commissioner  and  a  certificate  of  the  Board 
^Directors  of  said  trust  company  shall  be  filed  with  said  Bank 

certlfymg  !hat  the  amount  of  capital  stock  neces- 
saiy  to  create  a  commercial  banking  and  savings  department  has 


Trust  Companies 


75 


been  set  aside,  according  to  the  laws  of  the  State  of  Oklahoma,  and 
thereupon  the  State  Banking  Board  may,  in  its  discretion,  cause 
to  be  issued  a  certificate  to  said  trust  company,  authorizing  it  to 
establish  a  commercial  banking  and  savings  department  in  said 
trust  company.’ ’ 

History.  Senate  Bill  227,  C.  56,  L.  1925;  amending-  Section  4216,  C.  O. 

S.  1921;  S.  L.  1919,  p.  242. 

144.  Commercial  Bank  Under  Supervision  of  Commissioner. 

Section  6.  That  Section  4217,  Article  IV,  Chapter  24,  Com¬ 
piled  Oklahoma  Statutes,  1921,  is  hereby  amended  to  read  as  fol¬ 
lows  : 

“Section  4217.  That  the  commercial  banking  and  savings  de¬ 
partment  of  a  trust  company  established  under  the  provisions  of 
this  Act  shall  be  subject  to  to  all  laws  of  the  State  of  Oklahoma 
relating  to  state  banks  and  shall  be  under  the  supervision  of  the 
state  banking  board  and  the  bank  commissioner  of  the  State  of 
Oklahoma,  and  all  loans  or  investments  made  of  the  funds  in  the 
commercial  banking  and  savings  department,  except  the  savings 
and  time  deposits,  of  said  trust  company  shall  be  made  in  conformity 
with  the  laws  of  the  State  of  Oklahoma  relating  to  state  banks; 
provided,  that  all  loans  or  investments  made  of  the  funds  of  the 
savings  and  time  deposits  in  said  department  shall  be  made  in  ac¬ 
cordance  with  the  laws  governing  the  investments  of  trust  funds 
by  trust  companies  in  this  state,  as  provided  in  Section  4197,  of 
Article  TV,  Chapter  24,  Compiled  Oklahoma  Statutes,  1921.” 

History.  Senate  Bill  227,  C.  56,  L.  1925;  amending  Section  4217  C.  O. 

S.  1921;  S.  L.  1919,  p.  242. 

145.  Capital  Set  Aside  for  Commercial  Bank. 

Section  7.  That  Section  4218,  Article  IV,  Chapter  24,  Com¬ 
piled  Oklahoma  Statutes,  1921,  is  hereby  amended  to  read  as  fol¬ 
lows  : 

“Section  4218.  The  capital  stock  set  aside  for  the  commercial 
banking  and  savings  department  and  all  deposits  and  all  invest¬ 
ments  and  loans  and  securities  held  in  the  commercial  banking 
and  savinngs  department  shall  be  appropriated  solely  to  the  security 
and  payment  of  the  deposits  in  the  commerical  banking  and  sav¬ 
ings  department,  and  shall  not  be  mingled  with  the  investment  of 
the  remaining  capital  stock  or  other  money  or  property  belonging 
to  or  controlled  by  such  trust  company,  or  be  liable  for  the  debts 
or  obligations  thereof  until  after  the  deposits  in  said  commercial 
banking  and  savings  department  have  been  paid  in  full.  The  ac¬ 
counts  and  transactions  of  said  commercial  banking  and  savings 
department  shall  be  kept  separate  and  distinct  from  the  general 
business  of  the  corporation.” 


7b  Mothersead,  Bank  Comm.,  y. 

History.  Senate  Bill  227,  C.  56,  L.  1925:  amending  Section  4218,  C  O 
S.  1921  ;L.  S.  L.  1919,  p.  242. 

146.  Capital  Liable  for  Payment  of  Deposits. 

Section  8.  That  Section  4219,  Article  IV,  Chapter  24,  Com¬ 
piled  Oklahoma  Statutes,  1921,  is  hereby  amended  to  read  as  fol¬ 
lows  : 

Section  4219.  The  capital  stock  of  said  trust  company  appro¬ 
priated  to  the  commercial  banking  and  savings  department,  to¬ 
gether  with  the  stockholders’  liability  thereunder,  shall  be  held 
as  secuiity  for  the  payment  of  all  deposits  made  in  the  commercial 
banking  and  savings  department  and,  in  addition  thereto,  the  per¬ 
sons  making  such  deposits,  or  entitled  to  said  deposits,  shall  have 
an  equal  claim  with  the  other  creditors  of  such  trust  company  upon 
the  remaining  capital  and  other  property  of  the  corporation,  to¬ 
gether  with  the  stockholders’  liability  thereunder.” 

History.  Senate  Bill  227,  C.  56,  S.  L.  1925;  amending  Section  4219, 

Compiled  Oklahoma  Statutes,  1921;  S.  L.  1919  p.  242. 

147.  Withdrawals  of  Deposits.  Such  trust  company  may  at 

any  time  require  a  depositor  in  said  savings  department  to  give 
a  notice  not  exceeding  ninety  (90)  days  of  his  intention  to  with¬ 
draw  the  whole  or  any  part  of  his  deposits. 

History.  Section  4220,  C.  O.  S.  1921;  S.  L.  1919,  p.  242. 

147-a.  Supervision  and  Control.  The  savings  department  of 

a  trust  company  created  under  the  provisions  of  this  act  shall  be 
under  the  supervision  and  control  of  the  state  bank  commissioner 
of  the  State  of  Oklahoma,  and  be  subject  to  all  rules  and  regula¬ 
tions  of  the  state  banking  board  and  state  bank  commissioner  of  the 
►  t ate  of  Oklahoma;  provided,  that  the  depositors’  guaranty  law 
of  the  State  of  Oklahoma  shall  apply  to  the  savings  department 
o±  a  trust  company,  in  the  same  manner  and  to  the  same  extent 
that  said  law  now  applies  to  state  banks. 

History.  Sec.  4223,  C.  O.  S.  1921,  R.  L.  1919,  p.  242,  Sec.  8. 

148.  Accounts  of  Minors. 

Section  9.  That  Section  4221,  Article  IV,  Chapter  24,  Com- 

piled  Oklahoma  Statutes,  1921,  is  hereby  amended  to  read  as  fol¬ 
lows  : 

.  Se(dicm  4221.  A  trust  company  is  authorize  to  accept  and 
receive  commercial  and  savings  deposits  from  minors  or  other  in¬ 
competent  persons,  and  such  trust  company  is  authorized  to,  pay  to 
minors  or  incompetents,  any  funds  deposits  by  said  minors  or  in- 


Trust  Companies 


77 


competents,  in  the  commercial  banking  or  savings  department  of 
said  trust  company,  and  the  payment  of  said  deposits  and  interest 
thereon  to  said  minors  or  incompetents  shall  be  binding  on  them.” 

History.  Senate  Bill  227,  C.  56  L.  1925;  amending  C.  O  S.  1921,  Sec. 

4221;  S.  L.  1919,  p.  242. 

149.  Section  4222.  Investment  of  Trust  Funds.  All  funds  deposit¬ 
ed  in  the  savings  department  of  a  trust  company,  by  said  trust 
company  in  its  capacity  as  executor,  administrator,  guardian  or 
trustee,  which  under  the  law  should  be  invested  in  interest-bearing 
securities  for  the  benefit  of  the  cestue  que  trust,  shall  be  invested 
by  said  trust  company  according  to  law  for  the  benefit  of  the  cestue 
que  trust  within  ninety  (90)  days  from  the  date  of  the  deposit, 
or  said  trust  company  shall  pay  to  the  cestue  que  trust  interest  on 
all  uninvested  funds  after  ninety  (90)  days  from  the  date  of  said 
deposit  at  the  rate  of  eight  per  cent  (8%)  per  annum  until  the  same 

are  invested  according  to  law. 

History.  Sec.  4222  C.  O.  S.  1921;  S.  L.  1919,  p.  242. 

151.  Taxation  of  Capital  Stock  of  Commercial  Bank. 

Section  10.  That  the  capital  stock  set  aside  for  a  commercial 
banking  and  savings  department  of  a  trust  company  shall  be  as¬ 
sessed  and  taxed  upon  the  actual  value  of  the  shares  of  stock  of 
such  capital  so  set  aside  for  the  benefit  of  the  commercial  banking 
and  savings  department  as  the  shares  of  stock  in  State  banks  are 
now  assessed  and  taxed  in  the  county,  city,  town,  district  or  village 
where  such  trust  company  is  located.  All  property  held  by  a  trust 
company  in  a  fiduciary  capacity  shall  be  returned  and  rendered 
for  taxation  at  the  same  time  and  in  the  same  manner  as  now  pro¬ 
vided  by  law  for  other  property  of  like  kind. 

History.  Senate  Bill  227,  C.  56,  L.  1925.  (taxation  of  banks  as  pro¬ 
vided  for  in  Section  9607,  C.  O.  S.  1921). 

152.  Fees  Charged  Not  Considered  Interest. 

Section  11.  The  charges  or  service  fees  made  by  the  trust 
department  of  any  trust  company  organized  and  existing  under  the 
laws  of  this  state,  for  any  services  performed  or  under  any  powers 
granted  to  such  company,  under  the  laws  of  this  State,  shall  not 
be  considered  any  part  of  the  interest  charged  on  any  loan  and 
shall  not  be  subject  to  the  interest  laws  of  the  State. 

History.  Senate  Bill  227,  1925. 

153.  Unfair  Practices  Prohibited.  That  the  use  of  the  word 
trust  or  trust  company  by  any  person,  firm,  corporation,  or  com¬ 
pany  that  does  not  possess  the  paid-in  capital  required  by  law 
to  do  a  trust  company  business  under  the  laws  of  Oklahoma  shall  be 
unlawful  and  punishable  as  a  felony. 


78 


Mothersead,  Bank  Commv  v. 


History.  Sec.  4224,  C.  O.  S.  1921;  S.  L.  1919,  p.  242. 

154.  Section  14.  All  Acts  and  parts  of  Acts  in  conflict  here¬ 
with  are  hereby  expressly  repealed. 

History.  Senate  Bill  227,  C.  56,  L.  1925. 

Note:  1  his  Section  is  included  for  the  reason  that  an  examination 

of  this  coompilation  shows  some  of  the  trust  laws  heretofore  enacted 
have  been  amended  either  directly  or  indirectly  and,  since  this  Sec¬ 
tion  repeals  conflicting-  Acts,  it  is  included  as  a  matter  of  informa¬ 
tion. 


LOANS  AND  USURY 


155.  Legal  and  Contract  Rates  of  Interest.  The  legal  rate  of 
interest  shall  not  exceed  six  per  cent,  in  the  absence  of  any  contract 
as  to  the  rate  of  interest,  and  by  contract  parties  may  agree  upon 
any  rate  not  to  exceed  ten  per  cent  per  annum.  Said  rates  of 
six  and  ten  per  cent  shall  be  respectively  the  legal  rate  and  the 
maximum  contract  rates  of  interest. 

History.  R.  L.  1004;  S.  L.  1910,  p.  253,  Sec.  5097,  C.  O.  S.  1921. 

Usury  defined: 

Clement  Mtg  Co.  vs.  Johnston  83  Okla.  153,  201  Pac.  2407. 

Bank  vs.  Thomycon  57  Okla.  52!.  164  Pac  077. 

Dies  vs.  Bank  100  Okla.  205.  729  Pac  474. 

Munn  vs.  Securities  Co.  100  Okla.  105,  228  Pac.  150. 

Finerty  Inv.  Co.  vs.  Athey  89  Okla.  284,  215  Pac.  613. 

156.  Usury— —Penalty — Forfeiture.  The  taking,  receiving,  re¬ 
setting  or  charging  a  greater  rate  of  interest  than  is  provided  by 
the  preceding  section  shall  be  deemed  a  forfeiture  of  twice  the 
amount  of  interest  which  the  note,  bill  or  other  evidence  of  debt 
carries  with  it,  or  which  has  been  agreed  to  be  paid  thereon.  In 
case  a  greater  rate  of  interest  has  been  paid,  the  person  by  whom 
it  has  been  paid,  or  his  legal  representatives,  may  recover  from 
the  person,  firm  or  corporation,  taking  or  receiving  the  same,  in  an 
action  in  the  naturel  of  an  action  of  debt,  twice  the  amount  of  the 
entire  interest  paid;  provided,  that  such  action  shall  be  brought 
within  two  years  after  the  maturity  of  such  usurious  contract; 
provided,  further,  that  when  any  suit  is  brought  upon  any  note, 
bill  or  other  evidence  of  indebtedness  or  to  foreclose  any  mortgage 
or  lien  given  to  secure  such  indebtedness  when  a  greater  rate  of 
interest  has  been  collected,  reserved,  charged  or  received  than  is 
provided  for  in  this  act,  the  defendant,  or  his  legal  representative, 
may  plead  as  a  set-off  or  counter-claim  in  said  action  the  amount 
of  the  entire  interest  collected,  reserved,  charged  or  received  in 
said  transaction  or  in  all  such  transactions  between  the  same 
parties. 


Loans  and  Usury 


79 


History.  S.  L.  1916;  p. '24,  Amenling  R.  L.  1005:  Sec.  5098  C.  O.  S.  1921. 

Dies  vs.  Bank  100  Okla.  205,  229  Pac.  474. 

Munn  vs.  Securities  Co.  100  Okla.  105,  228  Pac.  150. 

Clement  Mtg.  Co.  vs.  Johnston  83  Okla.  153,  201  Pac.  247. 

Bank  vs.  Thompson  57  Okla.  521,  164  Pac.  977. 

Finerty  Inv.  Co.  vs.  Athey  89  Okla.  284,  215  Pac.  613. 

Statute  applies  only  to  loan  of  money. 

National  Novelty  Co.  vs.  Muncy  93  Okla.  219  Pac.  670. 

157.  Liquidation  of  Usurious  Contract— Tender— Procedure. 

Any  contract  for  the  loa  nof  money,  where  the  rate  of  interest  taken, 
received,  reserved  or  charged  is  greater  than  the  rate  as  declared 
in  Section  1004  of  the  Revised  Laws  of  Oklahoma,  1910,  may 
be  liquidated  in  the  following  manner :  On  the  date  such  contract 
falls  due,  or  at  any  time  before  suit  for  the  collection  thereof  is 
instituted,  the  payor,  his  agent,  attorney,  or  legal  representative 
may  tender  to  the  holder  thereof  the  exact  amount  of  money  re¬ 
ceived  from  the  lender,  less  the  amount  of  the  entire  interest  charg¬ 
ed,  received,  reserved,  or  cllelecte  dthereon,  said  tender  to  be  in  writ¬ 
ing,  and  to  such  party  only  as  service  may  be  had  as  in  case  of 
actions  at  law,  and  the  payee  of  said  contract  is  hereby  given 
twenty-four  hours  thereafter  to  answer  such  tender,  and  such  answer 
shall  be  in  writing,  and  the  acceptance  or  final  rejection  thereof 
shall  constitute  and  be  a  full  and  complete  satisfaction  of  such 
indebtedness.  If  no  such  tender  as  heretofore  provided  has  been 
made,  and  suit  is  instituted  in  a  court  of  competent  jurisdiction  for 
the  collection  thereof,  the  payor,  his  agent,  attorney,  or  legal  rep¬ 
resentative  may,  at  or  before  the  time  he  is  required  to  plead,  de¬ 
posit  in  the  court  the  exact  sum  of  money  received  on  said  contract, 
less  the  exact  amount  of  the*  entire  interest  taken,  received,  reserv¬ 
ed  or  charged,  and  the  cost  incurred,  and  if  the  same  be  not  ac¬ 
cepted,  the  court  or  jury  shall  make  a  finding  thereon  and  judg¬ 
ment  against  plaintiff  shall  be  rendered  on  said  finding  holding  such 
contract  and  debt  satisfied  by  reason  of  such  tender,  if  such  is 
found  to  have  been  made,  and  for  cost,  and  on  such  finding  the 
said  deposit  shall  be  returned  to  said  defendant.  Provided,  this 
section  shall  not  be  construed  to  prevent  the  debtor  from  bringing 
his  action  on  cross-petition,  or  in  an  original  suit  to  recover  twice 
the  amount  of  interest  charged  or  paid  in  said  contract  sued  upon. 
Provided,  further,  the  provisions  of  this  act  shall  not  operate  to 
repeal  or  modify  any  of  the  provisions  of  the  negotiable  instrument 

act. 

History.  S.  L.  1916,  p.  25,  Sec.  2:  Sec.  5099  C.  O.  S.  1921. 

This  amendment  not  unconstitutional. 

Dies  vs.  Bank  100  Okla.  205,  229  Pac.  475. 

Munn  vs.  Securities  Co.  lOOf  Okla.  105,  228  Pac.  150. 


158.  Indorser  and  Indorsee— Liability— Transfer  of  Causes. 

Any  person,  firm  or  corporation  violating  the  provisions  of  this 
act  and  the  laws  of  this  State  relating  to  the  loaning  of  money 
by  taking,  reserving,  charging  or  receiving  any  usurious  interest 


80  Mothersead,  Bank  Commv  v. 

on  any  note,  bill  or  other  evidence  of  debt,  and  who  shall  transfer 
the  same  to  a  bona  fide  purchaser  before  due  shall  be  liable  to  the 
maker  of  said  note,  bill  or  other  evidence  of  debt  for  double  all 
such  interest  taken,  reserved,  charged  or  received  and  it  shall  be 
competent  to  join  in  the  same  action,  causes  of  action  for  reserv¬ 
ing  and  charging  usurious  interest  with  causes  of  action  for  taking 
and  receiving  usurious  interest,  and  any  number  of  such  causes  of 
such  action  may  be  joined  in  the  same  action,  whether  growing 
out  of  the  same  transaction  or  different  transactions,  wherein  such 
usurious  interest  is  taken,  reserved,  charged  or  received;  provided, 
that  the  purchaser  of  any  note,  or  evidence  of  debt,  with  notice 
or  knowledge  that  same  was  executed  in  violation  of  interest  laws 
of  the  State,  shall  not  be  deemed  an  innocent  purchaser  and  such 
contract  shall  be  held  subject  to  all  the  defenses  and  penalties  pro¬ 
vided  in  this  act.  Provided,  further,  that  causes  of  action  for  the 
recovery  of  penalties  created  in  this  act  shall  not  be  assignable. 

History.  S.  L.  1916,  p.  26,  Sec.  3;  Sec.  5100  C.  O.  S.  1921. 

Forfeiture  of  double  interest  for  usurious  loan  of  money. 

Dies  vs.  Bank  100  Okla.  205,  229  Pac.  475. 

Munn  vs.  Securities  Co.  100  Okla.  105,  228  Pac.  150. 

159.  Jurisdiction  of  Court  Denied  in  Certain  Cases.  No  suit 
upon  any  contract  entered  into  after  the  passage  and  approval  of 
this  Act,  of  $300.00  or  less,  or  an  action  in  replevin  or  to  foreclose 
any  mortgage  or  lien  given  as  security  therefor,  shall  be  maintained 
in  courts  of  this  State,  and  no  petition  of  bill  of  particulars  shall  be 
filed  or  any  process  issued  where  the  amount  of  such  sum  is  $300.00 
or  less,  unless  at  the  time  of  filing  such  suit,  there  shall  be  filed 
with  such  bill  of  particulars  or  petition,  an  affidavit  setting  forth 
such  suit  brought  upon  any  note,  bill  or  other  evidence  of  indebt- 
laws  of  this  State,  and  that  a  greater  rate  of  interest  than  ten  per 
cent  has  not  been  charged,  reserved  or  collected  on  such  contract 
or  contracts  sued  upon ;  Provided,  that  if  upon  the  trial  of  any 
such  suit  brought  upon  any  note,  bill  or  other  evience  of  indebt¬ 
edness  of  $300.00  or  less,  or  in  replevin  or  for  the  foreclosure  of 
any  lien  given  to  secure  the  same,  it  shall  be  shown  by  the  evidence 
that  the  contract  sued  upon  is  usurious  and  made  in  violation  of 
the  interest  laws  of  this  State,  said  suit  shall  be  dismissed  at  the 
cost  of  the  plaintiff. 


Loans  and  Usury 


81 


History.  S.  L.  1916,  p.  27,  Sec.  5101  C.  O.  S.  1921. 

Quoere :  Does  this  section  violate  the  “Equal  protection  of  the  law” 
provision  of  constitution? 

Dies  vs.  Bank  100  Okla.  205,  229  Pac.  475. 

Does  not  apply  to  contract  for  sale  of  merchandise. 

National  Nov.  Co.  vs.  Muncy  93  Okla.  5,  219  Pac.  670. 

Alder  vs.  Chapman  91  Okla.  196,  219  Pac.  90. 

Clapp  vs.  Smith  91  Okla.  84,  216  Pac.  121. 

Where  note  is  one  of  series  and  total  amount  exceeds  $300,  section 
does  not  apply. 

Rennie  vs.  Mtg.  Co.  99  Okla.  217,  226  Pac.  314. 

160.  Banks  to  Report — Withdrawal  of  Charter — Procedure. 

It  shall  be  the  duty  of  the  officers  of  all  state  banks,  organized 
and  doing  business  under  and  by  virtue  of  the  laws  of  the  State,  to 
make  a  sworn  quarterly  report  to  the  Bank  Commissioner,  setting 
forth  the  rate  of  interest  charged,  retained,  reserved  or  collected 
upon  the  loans  made  in  excess  of  the  legal  or  contract  rate  of  in¬ 
terest  during  the  quarter  for  which  said  report  is  made,  and  such 
other  detailed  information  as  the  Bank  Commissioner  may  require 
concerning  rates  of  interest  charged,  and  all  such  reports  as  show 
the  rates  of  interest  exceeding  ten  per  cent  per  annum  have  been 
charged  shall  be  published  in  the  annual  report  of  the  Bank  Com¬ 
missioner.  Provided,  that  when  the  report  of  any  bank  shall  dis¬ 
close  that  such  bank  is  wilfully  loaning  money  in  violation  of  the 
interest  laws  of  the  State  it  shall  be  his  duty  to  immediately  re¬ 
port  such  violation  to  the  Governor,  who  may  direct  the  Bank 
Commissioner  to  bring  suit,  through  the  Attorney  General,  in  a 
court  of  competent  jurisdiction  in  the  county  where  the  bank  is 
located,  to  cancel  the  charter  of  such  bank,  and  the  judgment  of  the 
court  on  the  trial  of  said  issue  shall  find  the  defendant  bank  guilty 
or  not  guilty,  and  if  the  judgment  is  guilty  it  shall  further  provide 
for  the  cancellation  of  the  charter  of  said  bank  and  the  liquida¬ 
tion  of  the  assets  of  said  bank  as  the  law  now  provides  in  cases 
of  insolvent  banks,  from  which  judgment  either  party  shall  have 
the  right  of  appeal  to  the  Supreme  Court,  as  in  civil  cases.  Upon 
such  appeal  being  filed,  the  Supreme  Court  shall  hear  and  detemine 
same  as  an  advanced  case. 

History.  S.  L.  1916,  p.  27,  Sec.  5;  Sec.  5102  C.  O.  S.  1921. 

Alder  vs.  Chapman  91  Okla.  196,  219  Pac.  91. 

161.  Attorney’s  Fee.  In  all  cases  where  an  action  is  brought 
by  any  person  to  recover  the  penalty  prescribed  by  the  preceding 
section  the  prevailing  party  in  such  action  shall  be  entitled  to  re¬ 
cover,  as  part  of  the  costs,  a  judgment  against  the  other  party  to 
such  actionn  for  a  reasonable  attorney’s  fee  in  a  sum  not  less  than 
ten  dollars,  to  be  fixed  by  the  court,  for  the  use  and  benefit  of  the 
attorney  of  record  of  the  prevailing  party,  together  with  all  costs. 

History.  R.  L.  1006,  S.  L.  1910,  p.  253;  Sec.  5103  C.  O.  S.  1921. 

Prevailing  party  is  entitled  to  attorney  fee. 

Loan  Co.  vs.  Development  Co.  81  Okla.  172,  197  Pac.  484. 


/ 


82  Mothersead,  Bank  Commv  v. 

Ruby  vs.  Warrior  71  Okla.  83,  175  Pac.  359. 

Bank  of  Buffalo  vs.  Verm.  68  Okla.  43,  171  Pac.  450. 

162.  Interest  May  Be  Deducted  From  Loan.  The  interest 
which  would  become  due  at  the  end  of  a  term  for  which  a  loan  is 
made,  not  exceeding  one  year’s  interest  in  all,  may  be  deducted  from 
the  loan  in  advance  if  the  parties  thus  agree. 

History.  R.  L.  1007;  Dak.  3722;  1890,  Sec.  915;  C.  O.  S.  1921,  Sec. 
5104. 

If  contract  not  usurious  at  inception  subsequent  plan  of  liquidating 
does  not  make  it  usurious. 

Clement  Mtg.  vs.  Jolmston,  83  Okla.  153,  201  l  ac.  249. 

163.  Interest  on  Judgments.  All  judgments  of  courts  of  rec¬ 
ord  and  justice  of  the  peace  shall  bear  interest  from  the  day  on 
which  they  are  rendered  at  the  rate  of  six  per  cent  per  annum ; 
Provided,  that  when  a  rate  of  interest  is  specified  in  any  contract, 
that  rate  shall  continue  until  payment  is  made,  and  any  judgment 
rendered  on  any  such  contract  shall  bear  the  same  rate  of  interest 
mentione  din  the  contract,  which  rate  shall  be  specified  in  the 
judgment ;  but  in  no  case  shall  such  rate  exceed  the  legal  contract 
rate  at  the  date  of  such  obligation. 

History.  R.  L .  1008;  S.  L.  1895,  p,  93;  5105  C.  O.  S.  1921. 

Judgments  bear  6  per  cent,  interest  unless  contract  provides  greater. 

Daniels  vs.  Bunck  98  Okla.  47,  223  Pac.  841. 

Flcicha  vs.  Richie  91  Okla.  95,  216  Pac.  644. 

164.  Interest  on  Contracts  After  Breach.  Any  legal  rate  of 
interest,  stipulated  by  a  contract,  remains  chargeable  after  a  breach 
thereof,  as  before,  until  the  contract  is  superseded  by  a  verdict  or 
other  new  obligations. 

History.  R.  L.  1009;  Dak.  3725;  S.  L.  1890,  Sec.  918:  C.  O.  S.  1921, 
Sec.  5106. 

Daniels  vs.  Bunch  98  Okla.  47,  223  Pac.  841. 

165.  Banks— Taxation  of— Shares  of  Stock— Deductions.  Every 
bank  located  within  this  State,  whether  such  bank  has  been  organ¬ 
ized  under  the  banking  laws  of  this  State,  or  any  other  territory 
or  state,  or  of  the  United  States,  shall  be  assessed  and  taxed  upon 
the  actual  value  of  shares  of  stock  therein,  in  the  county,  town,  dis¬ 
trict,  village,  or  city  where  such  bank  or  banking  association  is  lo  ¬ 
cated  whether  such  stockholders  reside  in  such  place  or  not,  less 
such  portion  thereof  as  is  invested  in  any  bonds  issued  against  the 
public  building  fund,  issued  under  the  authority  of  chapter  89,  of 
the  session  laws  of  Oklahoma,  1911,  being  senate  bill  No.  198,  of 
said  session,  and  less  such  portion  thereof  as  is  invested  in  real 
estate  situated  in  this  State,  which  may  be  separately  assessed  and 
taxed.  Such  shares  shall  be  listed  and  assessed  with  regard  to  the 
ownership  and  value  thereof  as  they  existed,  on  the  first  day  of 
January  annually,  subject,  however,  to  the  restriction  that  taxation 


Loans  and  Usury 


83 


of  such  shares  shall  not  be  at  a  greater  rate  than  is  assessed  upon 
any  other  moneyed  capital  in  the  hands  of  the  individual  citizens 
of  the  State,  in  the  county,  town,  district,  village  or  city  where 
such  bank  is  located. 

The  shares  of  capital  stock  of  national  banks,  not  located  in 
the  State,  held  in  this  State,  shall  not  be  required  to  be  listed  under 
the  provisions  of  this  act.  In  each  such  bank  there  shall  be  kept 
at  all  times  a  full  and  correct  list  of  the  names  and  residences  of  its 
stockholders,  and  of  the  number  of  shares  held  by  each ;  which  list 
shall  be  subject  to  the  inspection  of  the  officers  authorized  to  assess 
property  for  taxation ;  and  it  shall  be  the  duty  of  the  assessor  to  as¬ 
certain  a  correct  list  of  the  names  and  residences  of  all  stockholders 
in  any  such  bank,  with  the  number  and  assessed  value  of  all  such 
shares  held  by  each  stockholder  and  enter  the  total  value  of  the 
same  on  his  tax  list,  in  the  coroprate  name  of  such  bank  or  cor¬ 
poration  and  file  the  list  of  stockholders  with  the  county  clerk. 

The  officer  or  officers  authorized  to  receive  taxes  may,  all  or 
either  of  them,  have  an  action  to  collect  the  tax  assessed  on  any 
share  or  shares  of  bank  stock  from  any  property  oh  said  bank  or 
corporation  or  from  the  avails  of  the  sale  of  such  share  or  shares, 
and  the  tax  against  such  share  or  shares  shall  be  and  remain  a  lien 
thereon  from  January  first  in  each  year  until  the  payment  of  said 
tax.  For  the  purpose  of  collecting  such  taxes  it  shall  be  the  duty 
of  every  such  bank,  or  the  managing  officer  or  officers  thereof, 
to  pay  the  tax  assessed  against  said  bank,  or  the  stock  thereof, 
and  to  retain  so  much  of  every  dividend  or  dividends  belonging  to 
such  stockholders  as  shall  be  necessary  to  pay  any  taxes  levied  upon 
their  shares  of  stock  respectively  until  it  shall  be  made  to  appear 
to  such  bank  or  its  officers  that  such  taxes  have  been  paid;  and 
they  may  sell  any  oij  said  stock  to  reimburse  said  bank  for  any 
taxes  so  paid  on  same ;  and  any  officer  of  said  bank  who  shall  pay 
over  or  authorize  paying  over  of  any  such  dividend  or  dividends  or 
any  portion  thereof,  contrary  to  the  provisions  of  this  section,  shall 
hereby  become  liable  for  such  tax ;  and  if  the  said  tax  shall  not  be 
paid,  the  collector  of  taxes  where  said  bank  is  located  shall  proceed 
to  collect  the  same  in  the  manner  in  which  taxes  on  personal  prop¬ 
erty  are  required  to  be  collected  by  this  act,  or  by  suit  in  the  dis¬ 
trict  court.  Taxes  due  upon  any  property  in  the  hands  of  any 
receiver  appointed  by  any  court  in  this  State,  or  in  the  hands  of  any 
assignee  or  trustee,  shall  be  a  prior  first  lien  upon  all  of  said  property 
and  shall  be  paid  by  such  receiver,  assignee  or  trustee  before  any 
other  claim  except  his  personal  costs. 

History.  S.  L.  1921,  p.  288,  Sec.  1,  amending-  S.  L.  1919'  COS  1921 
Sec.  9607. 

Taxes  upon  shares  of  stock  of  bank  are  not  lien  upon  assets  in  hands 
of  Bank  Commissioner. 

Walcott  vs.  McCarroll  88  Okla.  279,  213  Pac.  296. 

Gourd  vs.  Bank  90  Okla.  298,  217  Pac.  358. 


84 


Mothersead,  Bank  Comm.,  v. 


Real  property  based  on  assessed  value  may  be  deducted  from  asses¬ 
sable  value  of  shares  of  stock,  but  it  must  be  assessed  separately — 
Burden  on  bank  to  right  of  deduction. 

In  re  National  Bank  100  Okla.  155,  228  Pac.  953. 

In  re  First  National  Bank  93  Okla.  233,  220  Pac.  913. 

164.  Notes— Bonds— Choses  in  Action  Taxed.  Any  person 

owning  any  bond,  note  of  any  duration  of  over  eight  months  or 
other  choses  in  action  evidenced  by  writing,  located  in  the  State 
of  Oklahoma,  may  take  same  to  the  office  of  the  county  treasurer 
of  the  county  in  which  the  owner  of  said  bond,  note  of  a  duration 
exceeding  eight  months,  or  other  choses  in  action,  resides  or  he  may 
send  a  description  of  the  same  to  said  county  treasurer,  and  pay 
to  said  county  treasurer  a  tax  of  two  per  centum  of  the  face  amount 
thereof  for  five  years,  or  at  the  option  of  such  person,  for  a  greater 
or  less  number  of  years  at  the  same  rate,  and  the  said  county 
treasurer  shall  thereupon  make  an  endorsement  upon  said  bond,  note 
of  a  duration  of  over  eight  months,  or  other  choses  in  action,  cer¬ 
tifying  that  same  is  exempt  from  all  taxation  for  State,  county,  city, 
town,  township,  school  district  and  other  municipal  purposes  for 
a  period  of  five  years,  or  for  such  longer  or  shorter  period  for  which 
a  proportionate  tax  has  been  paid,  which  endorsement  or  receipt 
shall  be  duly  dated  and  signed  in  the  name  of  the  county  treasurer 
of  the  county  in  which  said  property  is  located  and  where  said  tax 
is  paid,  and  with  the  seal  of  the  treasurer  of  said  county  affixed. 
Provided,  that  provisions  of  this  act  shall  not  apply  to  any 
property  which  under  the  existing  laws  is  not  subject  to  taxation, 
and  prvided  further,  all  property  taxable  under  the  provisions 
of  this  act  and  owned  by  a  non-resident  of  the  State  of  Ok¬ 
lahoma,  shall  be  listed  for  taxes  in  the  county  in  which  such  evi¬ 
dence  f  inebt.eness  is  located;  and,  provided,  further,  nothing  in 
this  act  shall  cause  any  part  of  the  capital  stock  of  a  corporation 
to  be  exempt  from  taxation ;  and,  provided,  further,  the  bonds, 
notes  and  other  choses  in  action,  evidenced  in  writing  held  by  bank¬ 
ing  corporations  which  pay  taxes  on  its  capital  stock,  surplus  and 
undivided  profits,  shall  not  be  subject  to  th  eprovisions  of  this  act. 

History.  S.  L.  1917,  p.  484,  Sec.  1;  Sec.  9608  C.  O. ,  S.  1921. 

Not  unconstitutional. 

Harrell  vs.  Suter  100  Okla.  56,  227  Pac.  403. 

Not  applicable  if  note  less  than  eight  months. 

Kelley  vs.  Hamilton  78  Okla.  179,  189  Pac.  535. 

Tippet  vs.  Fox  95  Okla.  205,  218  Pac.  1057. 

Does  not  apply  to  choses  in  action  of  non  residents  not  in  state. 

Pappas  vs.  Company  92  Okla.  25,  217  Pac.  474. 

165.  Property  Subject  to  Tax  Listed.  All  property  taxable 
under  provisions  of  this  act,  shall  be  listed  for  taxation  as  pro¬ 
vided  for  in  Section  1,  hereof,  within  sixty  (60)  days  after  this 
act  becomes  effective;  provided,  such  property  is  now  in  existence 
and  all  other  property  subject  to  taxation  under  the  provisinos 


Tax  on  Money  and  Credits 


85 


of.  this  act  shall  be  listed  for  taxation  as  provided  for  herein,  within 

sixty  days  from  the  date  of  execution  of  the  evidence  of  such  in¬ 
debtedness. 

History.  S.  L.  1917;  p.  485,  Sec.  3;  Sec.  9610,  C  .O.  S.  1921. 

166.  Collected— For  What  Purposes.  The  tax  provided  for 
m  this  act  is  hereby  levied  and  collected  for  the  following  specific 
purposes;  to-wit: 

First.  For  the  contingent  fund  of  the  county  in  which  such 
tax  is  paid,  one-half  of  such  amount  collected. 

Second.  For  aid  of  the  common  schools  of  the  county  in  which 
said  tax  is  paid  one-half  of  such  amount  collected ;  Provided,  that 
it  shall  be  the  duty  of  the  county  treasurer  of  each  county  in  ap¬ 
portioning  the  one-half  apportioned  for  the  use  of  the  common 
schools  to  apportion  same  upon  a  uer  capita  basis,  based  upon  the 
number  of  children  of  scholastic  age  in  each  and  every  school  dis¬ 
trict  in  said  county. 

History.  S.  L.  1917,  p.  485,  Sec.  4;  Sec.  9611  C.  O.  S.  1921. 

Tax  must  be  paid  before  note  can  be  introduced  in  evidence 

Harrell  vs.  Suter,  100  Okla.  56,  277  Pac.  404. 

167.  Penalty  for  Violation.  In  case  any  person,  firm  or  cor¬ 
poration  holding  or  owning  any  property  subject  to  taxation  under 
provisions  of  this  act,,  fails  to  list  such  property  and  pay  the  taxes 
provided  for  m  Section  1,  of  this  act,  within  the  time  specified, 
such  person,  firm  or  corporation  may  pay  such  taxes  at  any  time 
thereafter,  together  with  a  penalty  thereon,  in  the  sum  of  5%  of 

i?ei/iCe*Va^Ue  .°?  such  evidence  of  indebtedness  and  such  penalty 
shall  be  m  addition  to  the  tax  provided  for  in  this  act. 

History.  S.  L.  1917,  p.  485,  Sec.  5;  Sec.  9612  C.  O.  S.  1921. 

168.  Not  Admitted  in  Evidence  Unless  Listed.  No  bond  or 
note  of  over  eight  months  duration  or  other  choses  in  action,  which 
has  not  been  registered  with  the  county  treasurer  of  the  county 

n  ^  *s  l°ca^ed  and  the  tax  paid  in  accordance  with  this  act 
shall  be  admitted  in  evidence  in  any  of  the  courts  of  the  State  of 
Oklahoma ;  provided,  that  this  act  shall  not  apply  to  notes  secured 
by  real  estate  mortgages  which  have  been  or  hereafter  may  be  reg¬ 
istered  under  the  provisions  of  Chapter  246,  Session  Laws,  1913  as 
amended  by  Chapter  105,  Session  Laws,  1915  (9585-9596). 

History.  S.  L.  1917,  p.  486,  Sec.  6;  Sec.  9613  C.  O.  S  1921 

Harrell  vs.  Suter  100  Okla.  56,  227  Pac.  404.  *  7 

TAX  ON  MONEY  AND  CREDITS 

Tax — Ad  Valore  mTax. 

Section  1.  That  hereafter  money  shall  not  be  subject  to  ad 
valorem  or  other  tax  as  personal  property  nor  to  any  form  of  tax 
other  than  as  herein  provided. 

Same — Levy. 


86 


Mothersead,  Bank  Comm.,  v. 


Section  2.  There  is  hereby  levied  in  lieu  of  existing  law  a  tax 
at  the  rate  of  one-tenth  of  one  per  cent  on  all  monies,  certificates  .of 
deposit,  or  other  evidence  thereof,  of  any  individual,  co-partnership, 
or  corporation,  building  and  loan  association,  joint  stock  associa¬ 
tion  or  trust  association  in  this  state  on  the  first  day  of  January  of 
each  calendar  year  whether  such  money  is  in  the  personal  custody 
of  such  owner  or  on  deposit  in  any  bank,  trust  company,  building 
and  loan  association  or  other  depository  of  money ;  provided,  how¬ 
ever,  the  provisions  of  this  Act  shall  not  apply  to  moneyed  capital 
in  this  state  coming  in  competition  with  state  and  national  banks 
as  defined  in  the  Act  of  Congress  of  March  4th,  1924,  nor  to  certifi¬ 
cates  of  stock  or  evidence  of  deposit  issued  by  building  and  loan 
associations. 

Same — Property  Scheduled  for  Taxation. 

Section  3.  Each  person,  corporation,  co-partnership,  .  joint 
stock  association,  trust  association,  building  and  loan  association, 
or  any  receiver  or  trustee,  in  this  state,  shall  schedule 
for  taxation  all  money,  certificates  of  deposit  or  other  eiv- 
dence  thereof,  belonging  to  such  person,  corporation,  co-part¬ 
nership  ,  joint  stock  assoiation,  trust  association,  building  and 
loan  association  or  in  the  custody  or  possession  of  such  re¬ 
ceiver  or  trustee  on  hand  and  in  possession  on  the  first 
day  of  January  of  each  calendar  year,  as  is  now  provided  by  lawT 
for  listing  personal  property  for  taxation.  Property  coming  under 
the  tax  classification  provided  in  this  Act  shall  be  assessed  separately 
from  all  other  property  and  shall  not  be  computed  in  the  total 
assessed  valuation  of  any  county  by  any  excise  board,  or  by  the 
State  Board  of  Equalization  for  ad  valorem  tax  levy  purposes,  ex¬ 
cept  to  the  extent  of  the  provisions  of  this  Act,  nor  in  the  compu¬ 
tation  of  bond  levy  limitations,  either  by  the  state  or  any  sub-di¬ 
vision  thereof.  It  shall  be  the  duty  of  the  State  Examiner  and  In¬ 
spector  to  supply  county  assessors  with  separate  and  proper  blanks 
for  recording  tax  returns  under  this  Act. 

History.  H.  B.  88,  Chapter  120,  S.  L.  1925. 

170.  Cheats,  Frauds  and  Bogus  Checks. 

Section  1.  Section  2146,  of  Article  53,  of  Chapter  6,  of  the 
Compiled  Statutes  of  Oklahoma,  1921,  is  hereby  amended  to  read  as 
follows : 

“Section  2146.  Every  person  who,  with  intent  to  cheat  and 
defraud,  shall  obtain  or  attempt  to  obtain  from  any  person,  firm 
or  corporation,  any  money,  property,  or  valuable  thing,  of  the  value 
Twenty  ($20.00)  Dollars,  or  less,  by  means  or  by  use  of  any  trick 
or  deception,  or  false  or  fraudulent  representation,  or  statement  or 
pretense,  or  by  any  other  means  or  instrument  or  device  commonly 
called  the  “confidence  game”,  or  by  means  or  use  of  any  false 


Laws  Gov.  Domestic  and  Foreign  Building  Loan  Ass’n.  87 

or  bogus  checks,  or  by  any  other  written  or  printed  or  eneraved 

be  gUilty  °f  a  raand 

one  hundred  fflm  m  n  if  b®  PT^ed  by  a  fine  not  to  exceed 
e  hundred  ($100  00)  Dollars,  or  by  imprisonment  in  the  county 

imprisonment101^  ^bn  thf (f  0),  days>  or  by  both  such  fine  and 
thiL  referred  tt  V&  U®  °v  h°  m°ney’  Property  or  valuable 
tv  ?t2  nm  th  Preeedmg  Paragraph,  be  more  than  Twen- 

ffuiltvoTl  ^larS’  anJ  pf  ®01}  convicted  hereunder  shall  be  deemed 

State7 Penitplf-  y  ^  Sh?n  b®  Punished  by  imprisonment  in  the 
State  Penitentiary,  for  a  term  not  exceeding  seven  (7)  years  or 

by  a  fine  not  to.  exceed  Five  Hundred  ($500.00)  Dollars  orhv  both 

shad  fndudedchemr°nmr-  The  te™  “false  or  bo^us  check” 
al  “chide  checks  or  orders  given  for  money  or  property  which 

pay  same°rea  °"  f  insufficient  *“ds  of  the  maker  to 

pay  same  as  against  the  maker  or  drawer  thereof  the  making 

rawing  uttering  or  delivering  of  a  check,  draft  or  order  payment 

0  intent  sha11  be  p™«  facie’  S 

ot  intent  to  defraud  and  the  knowledge  of  insufficient  funds  in 

w  drawe^shairnVb1111  °r  d®Pository;  Provided,  such  maker 

or  drawer  shall  not  have  paid  the  drawee  thereof  the  amount  due 

thereon,  together  with  the  protest  fees,  within  five  days  from  the 

thlt  said  SZ%1S  preSf ted  for  Payment ;  and,  provided,  further, 

davs  aftLL™  -r  yder  “  Presented  for  payment  within  thirty 
days  after  same  is  delivered  and  accepted. 

The  word  “ credit”  as  used  herein,  shall  be  construed  to  mean 
an  arrangement  or  understanding  with  the  bank  or  depository  for 
the  payment  of  such  check,  draft  or  order.”  1  y’  101 

History.  C.  33,  S.  L.  1923. 


LAWS  GOVERNING  DOMESTIC  AND  FOREIGN  BUILDING 

LOAN  ASSOCIATIONS 


,  , 171,  f  ha^er'  At  fny  time  when  ten  or  more  persons  mav  desire 

form  a  building  and  loan  association  under  the  provisions  of  this 
article,  they  shall  make  application  to  the  secretary™”'  in  the 
anner  prescribed  by  Section  1304.  The  said  secretary  is  hereby  em 
powered  to  grant  charters  to  said  association,  provided  thft  no 
^ranted  under  or  by  virtue  of  the  provisions  of  this  article 

5376  a  0°Y  1921 CT  Peri°d  than  tW6nty  years'  (S-  1893>  §  H43  ) 


PlSewithTawati0n  eann°‘  d°  bUSineSS  in  0kl-homa  unless  it  com- 

Mdland  setrTB-  f  L'  ASS^  78  °kIa-  307>  190  Pac'  873- 

aland  S.  &  L.  Assn.  vs.  Development  Co.  81  Okla.  172,  197  Pac.  484. 


88  Mothersead,  Bank  Commv  v. 

172.  Capital  Stock.  I 

The  capital  stock  of  any  corporation  created  by  virtue  of  this 
article  shall  at  no  time  consist  of  more  than  two  thousand  five 
hundred  shares,  of  two  hundred  dollars  each,  or  five  thousand  shares 
of  one  hundred  dollars  each,  the  installments  on  which  stock  are  to 
be  paid  at  such  time  and  place  as  the  by-laws  shall  appoint,  no 
periodical  payment  to  be  made  exceeding  two  dollars  on  each  share, 
Every  share  of  stock  shall  be  subject  to  a  lien  for  the  payment  of 
unpaid  installments  and  other  charges  incurred  thereon,  under  the 
provisions  of  the  charter  and  by-laws,  and  the  by-laws  may  pre¬ 
scribed  the  form  and  manner  of  enforcing  such  lien.  New  shares 
of  stock  may  be  issued  in  lieu  of  the  shares  withdrawn  or  forfeited. 
The  stock  may  be  issued  in  one  or  more  successive  series  in  such 
amount  as  the  board  of  directors  or  stockholders  may  determine, 
and  any  stockholder  wishing  to  withdraw  from  the  said  corpora¬ 
tion  shall  have  power  to  do  so  by  giving  thirty  day’s  notice  of  his 
intention  to  withdraw,  when  he  shall  be  entitled  to  receive  the 
amount  paid  in  by  him,  and  such  proportion  of  the  profits  as  the 
by-laws  may  determine,  less  all  fines  and  other  charges.  Provided, 
that  at  no  time  shall  more  than  one-half  of  the  funds  in  the  treas-  I 
ury  of  the  corporation  be  applicable  to  the  demands  of  withdraw¬ 
ing  stockholders  without  the  consent  of  the  board  of  directors,  and 
that  no  stockholder  shall  be  entitled  to  withdraw  whose  stock  is 
held  in  pledge  for  security.  Upon  the  death  of  a  stockholder,  his 
legal  representative  shall  be  entitled  to  receive  the  full  amount 
paid  by  him  and  legal  interest  thereon,  first  deducting  all  charges 
that  may  be  due  on  the  stock.  No  fines  shall  be  charged  to  a  de-  1 
ceased  member’s  account  from  or  after  his  decease,  unless  the  legal 
representative  of  such  decedent  assumes  the  future  payments  of  the 
stock.  (S.  1893  tH44.)  5377  C.  0.  S.  1921. 

Section  construed. 

Holt  vs.  B.  &  L.  Assn.  78  Okla.  307,  190  Pac.  873. 

Rule  adopted  July  1,  1925,  by  Board. 

The  Building  and  Loan  Board  is  of  the  opinion  that  partial 
withdrawals  are  not  warranted  by  statute.  You  are,  therefore, 
instructed  to  discontinue  partial  withdrawal  privileges,  and  if  your 
by-laws  provide  for  partial  withdrawals  of  any  class  of  stock,  you  I 
should  amend  your  by-laws  to  conform  to  the  law.  When  stock  is 
assigned  to  the  Association  for  a  loan,  the  opinion  mentioned  does 
not  question  the  legal  right  of  an  association  to  apply  any  portion 
of  the  value  of  such  assigned  stock,  to  the  loan,  fines,  taxes,  in¬ 
surance,  or  any  other  legal  charge  against  the  assigned  stock  or 
property  jointly  mortgaged. 

173.  Capital  May  Be  Increased. 

Domestic  mutual  building  and  loa  nassociations,  organized  un- 


Laws  Gov. 


Domestic  and  Foreign 


Building 


Loan  Ass’n.  89 


der  the  laws  of  the  State  of  Oklahoma,  are  hereby  authorized  and 
empowered  to  increase  their  authorized  capital  stock  to  such  amount 
as  may  be  determined  advantageous  by  such  association,  in  the  man- 

?sr  fqna  ir«7HP Tnedc;  19°9'  S-  B-  138>  t00k  effect  February 
18,  1909.)  5378  C.  0.  S.  1921;  R.  L.  1294. 


.  How  and  When  Increased.  Any  such  association  desiring  to 
increase  its  authorized  capital  stock  may  do  so  at  any  regular  meet- 
mg  o±  the  stockholders  or  at  any  special  meeting  of  the  stockholders 
called  for  that  purpose.  Upon  the  presentation  to  the  secretary  of 
state  of  a  certified  copy  of  the  minutes  of  any  such  meeting,  certi¬ 
fied  to  by  the  officers  and  board  of  directors  of  such  association, 
showing  and  disclosing  that  a  majority  of  the  stockholders  desire 
ai?  ,11n^rease  caPhal  stock  to  the  amount  to  which  such  increase 
shall  be  made,  and  upon  the  payment  to  the  secretary  of  state  of 
the  regular  fees  prescribed  by  law,  it  shall  be  the  duty  of  the  secre¬ 
tary  ot  state  to  issue  to  any  such  association,  an  amended  charter 
and  articles  of  incorporation  which  shall  authorize  such  association 
to  increase  its  capital  stock  to  the  desired  amount  (L  1909  S 

R  138,  took  effect  February  18,  1909.)  5379  C.  0.  S.  1921,  R.’  L.‘ 
1295. 


174.  By-Laws— What  to  Contain.  The  number,  titles,  func¬ 
tions  and  compensation  of  the  officers  of  any  corporation  created 
by  virtue  of  this  article,  their  terms  of  office,  the  time  of  their  elec¬ 
tion,  as  well  as  the  qualifications  of  electors,  and  the  votes  and  man- 
iner  of  voting,  and  the  periodical  meetings  of  said  corporation,  and 
the  manner  and  terms  upon  which  loans  shall  be  made  and  repaid 
shall  be  determined  by  the  by-laws.  See  Note  (4).  R.  L.  1296  5380 
C.  O.  S.  1921. 

Rule  of  Board  adopted  July  1,  1925. 

The  constitution,  by-laws,  plans  and  methods  of  conducting  bus¬ 
iness,  and  the  manner  of  keeping  the  books  and  records  of  Building 
and  Loan  Associations  doing  business  in  the  State  of  Oklahoma,  in¬ 
cluding  to  form  and  manner  of  issuing  contracts  or  stock,  notes, 
mortgages  and  all  matters  incident  thereto,  must  be  submitted  to 
and  approved  by  the  Building  and  Loan  Board. 

175.  By-Laws.  The  by-laws  of  every  corporation  created  un¬ 
der  the  provisions  of  this  article,  or  of  those  accepting  the  provisions 
of  the  same,  shall  be  deemed  and  taken  as  its  law,  subordinate  to  this 
statute.  They  shall  be  made  by  the  stockholders,  or  the  board  of  dir¬ 
ectors,  at  their  annual  meeting  or  at  any  stated  meeting  of  the  board 
of  directors.  They  shall  prescribe  the  time  and  place  of  meeting 
of  the  corporation,  the  power  and  duty  of  its  officers,  the  fines  and 
penalties  to  be  imposed  upon  delinquents  and  borrowers  for  the 
non-payment  of  dues,  interest  and  premiums,  and  such  other  mat¬ 
ters  as  may  be  pertinent  and  necessary  for  the  business  to  be  trans- 


90 


Mothersead,  Bank  Comm.,  v. 


Sec.  5,  C.  28  L.  1925  require  all  by-laws  to  be  approved  by  Building 
and  Loan  Board. 

Rule  of  Board  adopted  July  1,  1925. 

The  Building  and,  Loan  Board  is  of  the  opinion  that  it  is  both  j 
possible  and  probable  that  conditions  may  prevail  when  fixed  divi¬ 
dends  on  full  paid  stock  as  now  issued  would  receive  a  greater  por¬ 
tion  of  the  earnings  of  your  Association  than  installment  and  pre¬ 
paid  stock.  There  is  a  possibility  that  this  would  violate  the  mutu¬ 
ality  of  the  Associations,  and  the  Building  and  Loan  Supervisor  is 
hereby  instructed  to  request  all  Associations  to  discontinue  issuing 
stock  to  guarantee  a  fixed  rate  of  dividend  unless  the  certificate  in 
addition  to  the  rate  as  specified,  shall  contain  a  proviso  as  follows: 

Provided  that  the  earnings  of  the  Association  shall  be  sufficient 
to  pay  the  same  rate  of  dividend  as  is  provided  for  in  this  certi¬ 
ficate  on  all  other  classes  of  stock,  and  that  in  no  case  shall  a  greater 
rate  of  dividend  be  paid  on  full  paid  stock  than  is  paid  on  install¬ 
ment  and  pre-paid  stock. 

176.  Payment  of  Loans.  A  borrower  may  repay  a  loan  at  any 
time  by  the  payment  to  the  corporation  of  the  principal  sum  bor¬ 
rowed,  together  with  interest  not  to  exceed  twelve  per  cent  per  an¬ 
num;  together  with  such  per  cent  of  premium  per  annum  as  may 
have  been  bid  for  the  preference  or  priority  of  such  loan,  and  any 
fines  or  charges  that  may  be  imposed  upon;  such  stockholders  at  the 
time  of  such  repayment ;  or  in  case  the  amouunt  of  premiu  mbid  for 
the  priority  of  such  loan  be  deducted  in  advance,  and  the  repay¬ 
ment  thereof  is  made  before  the  expiration  of  the  eighth  year  after 
the  organization  of  the  corporation  there  shall  be  refunded  to  such 
borrower  one-eighth  of  the  premium  paid  for  every  year  of  the 
said  eight  years  unexpired.  Provided,  that  when  the  stock  is  is¬ 
sued  in  separate  series,  the  time  shall  be  computed  from  the  date  of 
the  issuing  of  the  shares  on  which  the  loan  was  made.  Provided, 
further,  that  when  the  series  of  stock  has  a  less  period  than  eight 
years  to  complete  full  payment  thereof,  there  shall  be  refunded 
only  pro  rata  for  the  unexpired  term  of  the  series;  and  provided 
further;  that  when  the  by-laws  of  the  corporation  prescribe  a  dif¬ 
ferent  manner  and  terms  upon  which  a  loan  may  be  repaid,  then 
the  repayment  can  only  be  made  in  accordance  with  the  by-laws  of 
such  corporation.  (S.  1893,  tll47.)  Sec.  1298  It.  L.  5382  C.  O.  S. 
1921. 

Stock  legally  issued  in  Conformity  with  By  Laws. 

McGuire  vs.  Association  112  Okla.  158,  240  Pac.  722. 

177.  Charges  Not  Usurious.  No  premiums,  fines  or  interest  on 
such  premiums  that  may  accrue  to  the  said  corporation  according 
to  the  provisions  of  this  article  shall  be  deemed  usurious  except  as 
herein  otherwise  provided ;  and  the  same  may  be  collected  as  debts 
of  like  amount  are  now  bv  law  collected  in  this  state.  (L.  1893, 
U148.)  Note  (6).  1299  R.  L. :  5384  C.  0.  S.  1921. 


Laws  Gov. 


Domestic  and  Foreign 


Building  Loan  Ass’n. 


91 


Under  old  law  loan  without  bid  does  not  authorize 
’urns  and  such  premiums  and  dues  will  be  applied  to 
Aetna  B.  &.  L.  Assn.  vs.  Rouch  32  Okla.  735,  124  Pac. 


charging  prem- 
discharge  loan. 
24. 


1^8.  Neglect  Not  to  Affect  Life  of  Corporation.  No  corpora- 
ton  created  under  this  article  shall  cease  or  expire  from  neglect 
on  the  part  of  the  corporation  to  elect  officers  at  the  time  mentioned 
m  t  eir  charter  or  by-laws,  and  all  officers  elected  by  such  corpora¬ 
tion  shall  hold  their  offices  until  their  successors  are  duly  elected 
and  qualified.  (L.  1893,  U149.)  1300  R.  L. :  5384  C.  0.  S.  1921. 


179.  Association  May  Purchase  at  Sheriff’s  Sale.  Any  build¬ 
ing  or  loan  association  incorporated  under  the  provisions*  of  this 
article,  or.  any  one  heretofore  or  hereafter  incorporated,  accepting 
the  provisions  of  the  same,  is  hereby  authorized  and  empowered  to 
purchase  at  the  sheriff’s  or  other  judicial  sale,  or  at  any  other  sale, 
public  or  private,  any  real  estate  upon  which  such  association  may 
aye  or  hold  any  mortgage,  judgment,  lien  or  other  incumbrance, 
or  m  which  said  association  may  have  an  interest,  and  may  sell,  con¬ 
vey,  lease  or  mortgage  at  pleasure  the  real  estate  so  purchased,  or 
any  other  that  such  association  may  hold  or  be  entitled  to,  to  any 
person  whatsoever ;  and  all  sales  of  real  estate  heretofore  made  by 
such  association  to  any  person  or  persons  not  members  of  the  associ¬ 
ation  so  selling  are  hereby  confirmed  and  made  valid  (L  1893 
tll50.)  1301  R.  L.:  5385  C.  0.  S.  1921.  ’ 


Note:  See  Constitution  of  Oklahoma,  Art.  XXII,  Sec.  2,  limit¬ 
ing  to  seven  years  the  period  for  which  any  corporation  may  hold 
title  to  real  estate  bid  in  on  foreclosure  or  taken  for  debts. 

Validating  Securities.  All  mortgages  heretofore  given  to 
the  building  and  loan  associations  organized  under  the  laws  of  this 
state,  accepting  the  provisions  of  this  article,  are  hereby  declared 
good  and  valid  to  all  intents  and  purposes,  as  though  they  had  been 
made  to  corporations  organized  under  the  provisions  of  this  article 
(L.  1893,  11151.)  1302  R.  L. :  5386  C.  O.  S.  1921. 

181.  Mode  of  Incorporation  The  charter  of  an  intended  cor¬ 
poration  under  the  provisions  of  this  article  must  be  subscribed  by 
ten  or  more  persons,  a  majority  of  whom  must  be  citizens  of  this 
state  and  set  forth : 


First.  The  name  of  the  corporation. 

Second.  The  purpose  for  which  it  is  formed. 

Third.  The  place  where  it  has  its  principal  office,  or  the  bus- 
mess  is  to  be  transacted. 

Fourth.  The  time  for  which  it  is  to  exist. 

Fifth.  The  names  and  residences  of  the  subscribers,  and  the 
number  of  shares  subscribed  by  each. 


92 


Moth erse a i),  Bank  Comm.,  v. 


Sixth.  The  number  of  its  directors,  and  the  names  and  resi¬ 
dences  of  those  who  are  selected  as  directors,  and  who  shall  hold 
their  office  until  the  next  annual  election,  or  until  their  successors 
are  elected  and  qualified. 

Seventh.  The  amount  of  its  capital  stock,  and  the  number  and 
par  value  of  its  shares.  (L.  1893,  Sec.  1152.)  1303  R.  L. :  5387,  C. 
O.  S.  1921. 

182.  Same — Notice  of  Application  for  Charter.  Notice  of  the 
intention  to  apply  for  such  charter  shall  be  inserted  in  two  news¬ 
papers  of  general  circulation  printed  in  the  proper  county  for  three 
weeks  setting  forth  briefly  the  character  and  object  of  the  corpora¬ 
tion  to  be  formed,  and  the  intention  to  make  application  therefor. 
The  certificate  for  a  corporation  under  the  provisions  of  this  article 
shall  set  forth  all  that  is  hereinbefore  required  to  be  set  forth ;  the 
same  shall  be  acknowledged  by  at  least  five  of  the  subscribers 
thereto  before  a  notary  public  or  other  officer  authorized  to  admin¬ 
ister  oaths,  and  they  shall  also  make  and  subscribe  an  oath  or  af¬ 
firmation  before  him,  to  be  indorsed  on  said  certificate,  that  the 
statements  contained  therein  are  true.  The  said  certificate,  accom¬ 
panied  with  proof  of  publication  of  the  notice  as  hereinbefore  pro¬ 
vided,  shall  then  be  produced  to  the  secretary  of  state,  who  shall 
examine  the  same,  and  if  he  find  it  to  be  in  proper  form,  as  specified 
in  the  foregoing  sections,  he  shall  approve  thereof  and  endorse  his 
approval  thereon,  and  issue  letters  patent  in  the  usual  form,  incor¬ 
porating  the  subscribers  and  their  associates  and  successors  into  a 
body  politic  and  corporate  in  deed  and  in  law,  by  the  manner 
chosen ;  an  the  said  certificate  shall  be  recorded  in  the  office  of  the 
secretary  of  state,  in  a  book  to  be  by  him  kept  for  that  purpose,  and 
a  certified  copy  of  the  said  certificate  shall  be  recorded  in  the  office 
of  the  register  of  deeds  of  the  county  where  the  principal  business 
of  the  association  is  transacted.  Certified  copies  of  the  records 
thereof  shall  be  competent  evidence  for  all  purposes  in  the  several 
courts  of  this  state.  (S.  1893.  11153.  Note  7.)  1304  R.  L. :  5388  C. 
O.  S.  1921. 

183.  Management  of  Business.  The  business  of  every  corpora¬ 
tion  created  hereunder,  or  of  those  accepting  the  provisions  of  this 
article,  shall  be  managed  and  conducted  by  a  president,  a  board  of 
directors  or  trustees,  a  secretary  and  treasurer,  and  such  other  of¬ 
ficers  or  agents  as  the  by-laws  may  provide.  The  directors  or  trus¬ 
tees  shall  be  elected  annually  by  the  stockholders  or  members,  at 
the  time  fixed  by  the  by-laws,  and  shall  hold  their  office  until  others 
are  chosen  and  qualified  in  their  stead;  the  manner  of  such  choice 
ond  of  the  choice  of  appointment  of  all  other  agents  or  officers  shall 
be  prescribed  by  the  by-laws.  The  number  of  directors  or  trustees 
shall  not  be  less  than  five,  one  of  whom  shall  be  chosen  president 
by  the  directors,  or  by  the  members  of  the  corporation,  as  the  by- 


Laws  Gov.  Domestic  and  Foreign  Building  Loan  Ass’n.  93 

laws  may  direct;  the  members  of  said  corporation  may,  at  a  meet¬ 
ing  called  for  that  purpose,  determine,  fix  or  change  the  number  of 
directors  or  trustees  that  shall  thereafter  govern  its  officers,  and  a 
majority  of  the  whole  number  of  such  directors  or  trustees  shall  be 
necessary  to  constitute  a  quorum.  The  treasurer  shall  give  bond  in 
such  sum,  and  with  such  sureties,  as  shall  be  required  by  the  by-laws, 
for  the  faithful  discharge  of  his  duties,  and  he  shall  keep  the  moneys 
of  the  corporation  in  a  separate  bank  account,  to  his  credit  as  treas¬ 
urer,  and  if  he  shall  neglect  or  refuse  so  to  do  he  shall  be  liable  to  a 
penalty  of  fifty  dollars  for  every  day  he  should  fail  so  to  do,  to  be 
recovered  at  the  suit  of  any  informer  in  an  action  of  debt.  (S. 
1893,  tll55.)  Note  (8).  1306  R.  L.:  5370  C.  0.  S.  1921. 

Rule  adopted  by  Board  July  1,  1925. 

The  constitution,  by-laws,  plans  and  methods  of  conducting  bus¬ 
iness,  and  the  manner  of  keeping  the  books  and  records  of  Building 
and  Loan  Associations  doing  business  in  the  State  of  Oklahoma, 
including  the  form  and  manner  of  issuing  contracts  or  stock,  notes, 
mortgages  and  all  matters  incident  thereto,  must  be  submitted  to 
and  approved  by  the  Building  and  Loan  Board. 

^-84.  Stock  Certificates.  The  directors  of  such  corporation 
shall  procure  certificates  of  stock,  and  shall  deliver  them  signed  by 
the  president  and  secretary  and  sealed  with  the  common  seal  of  the 
corporation  to  each  person  entitled  to  receive  the  same,  according 
to  the  number  of  shares  held  by  him,  which  certificate  or  evidence 
of  stock  shall  be  transferable  at  the  pleasure  of  the  holder  in  person 
or  by  attorney  duly  authorized  as  the  by-laws  may  prescribe,  sub¬ 
ject,  however,  to  all  payments  due  or  to"  become  due  thereon;  and 
the  assignee  or  the  party  to  whom  the  same  shall  have  been  so  trans¬ 
ferred  shall  be  a  member  of  said  corporation,  and  have  and  enjoy 
all  the  immunities,  privileges  and  franchises,  and  be  subject  to  all 
the  liabilites,  condtions  and  penaltes  incident  thereto,  in  the  same 
manner  as  the  original  subscriber  or  holder  would  have  been;  but 
no  certificate  shall  be  transferred  so  long  as  the  holder  is  indebted 
to  said  company,  unless  the  board  of  directors  shall  consent  thereto 
(S.  1893.  U156.)  1307  R.  L. :  5391  C.  0.  S.  1921. 

185.  Oath  of  Officers  in  Election.  No  person  acting  as  judge  or 
officer  for  holding  an  election  for  any  such  corporation  shall  enter 
upon  the  duties  of  his  appointment  until  he  take  and  subscribe  an 
oath  or  affirmation  before  a  notary  public  or  other  person  qualified 
by  law  to  administer  oaths,  that  he  will  discharge  the  duties  of  his 
office  with  fidelity,  that  he  will  not  receive  any  vote  but  such  as 
he  believes  to  be  legal,  and  if  any  such  judge  or  officer  shall  know¬ 
ingly  or  wilfully  violate  his  oath  or  affirmation  he  shall  be  subject 
to  all  the  penalties  imposed  by  law  upon  the  officers  of  the  general 
election  of  this  state  for  violating  their  duties,  and  shall  be  pro¬ 
ceeded  against  in  like  manner  and  with  like  effect.  (S  1893  tH57  ) 
1308  R.  L. :  5392  C.  O.  S.  1921. 


94 


M  OTH  ERSE  AD,  BANK  COMMv  V. 


186.  Vacancies.  In  case  of  death,  removal  or  resignation  of 
the  president,  or  any  of  the  directors,  secretary,  treasurer  or  other 
officer  of  such  company,  the  remaining  directors  may  supply  the 
vacancy  thus  created  until  the  next  general  election.  (S.  1893, 
tll58.)  1309  R.  L. :  5393  C.  0.  S.  1921. 

187.  Loans,  Procedure,  Rate  of  Interest.  Any  such  associa¬ 
tion  may,  by  its  by-laws,  dispense  with  the  offering  of  its  moneys  for 
bid,  and  in  lieu  thereof  loan  or  advance  its  moneys  to  members  at 
such  rate  of  interest  and  premium  as  may  be  provided  by  the  by¬ 
laws.  Such  premium  to  be  paid  in  installments,  shall  not  be  deemed 
usurious,,  but  shall  be  taken  to  be  the  payment  as  it  falls  due,  and 
the  same  shall  be  lawful,  in  so  far  as  the  said  premium,  together 
with  interest,  shall  not  exceed  one  per  cent  per  month. 

5394  C.  O.  S.  1921;  S.  L.  1913,  p.  446,  amending-  Sec.  1310  R.  L. 

Where  contract  made  not  in  conformity  with  building  and  loan  law, 
if  interest,  premiums,  etc.,  exceed  contractual  note,  contract  us¬ 
urious. 

Holt  vs.  Aetna  B.  &.  L.  Assn.  78  Okla.  307,  190  Pac.  874. 

Union  Savings  Assn.  vs.  Cummins,  78  Okla.  265,  190  Pac.  869. 

188.  To  Issue  Shares  in  Series.  Any  building  and  loan  associ¬ 
ation  may  issue  shares  of  stock  in  series,  or  on  what  is  known  as  the 
perpetual  or  permanent  plan,  when  each  share  shall  run  from  date 
of  issue ;  Provided,  that  the  by-laws  of  said  association  shall  state 
upon  which  plan  the  association  issues  shares.  (L.  1895,  p.  77.)  1311 

R.  L. :  5395  C.  O.  S.  1921. 

189.  Term  of  Office  of  Directors.  Any  building  and  loan  asso¬ 
ciation  may  elect  directors  or  trustees  for  a  longer  term  than  one 
year  if  such  term  be  set  forth  in  the  by-laws ;  Provided,  that  no 
director  or  trustee  shall  be  elected  for  a  longer  period  than  three 
years,  and  the  terms  of  at  least  two  such  directors  or  trustees  shall 
expire  each  year.  (L.  1895,  p.  77.))  1312  R.  L. :  5396  C.  O.  S.  1921. 

190.  May  Extend  Life  of  Association.  Every  such  corpora¬ 
tion  may  extend  the  time  of  its  duration  so  as  to  make  the  entire 
period  of  its  corporate  existence  not  to  exceed  fifty  years,  by  a 
vote  of  three-fourths  of  its  stockholders  at  any  meeting  called  for 
this  purpose,  thirty  days’  notice  having  first  been  given  each  stock¬ 
holder  by  postal  card  or  letter,  and  by  paying  to  the  secretary  of 
state  a  fee  of  two  dollars.  (L.  1895,  p.  77.)  131  R3.  L. :  5397  C.  O. 

S.  1921. 

191.  Semi-Annual  Report.  Every  such  corporation  doing  bus¬ 
iness  in  the  state  shall,  semi-annually,  in  the  months  of  January  and 
July,  publish  in  one  or  more  newspapers  in  the  city  or  county  where 
such  corporation  is  located,  a  statement  verified  by  the  oath  of  its 
president  or  secretary,  setting  forth  its  actual  financial  condition 
and  the  amount  of  its  property  and  liabilities,  under  a  penalty  of 
two  hundred  dollars  to  the  state,  to  be  recovered  by  civil  action  for 


Laws  Gov.  Domestic  and  Foreign  Building  Loan  Ass’n.  95 

the  benefits  of  the  association,  against  the  president,  secretary  or 
directois  on  the  relation  of  any  stockholder.  It  shall  also  deposit 
a  copy  of  said  statement,  verified  as  aforesaid,  in  the  office  of  the 
secretary  of  state.  (L.  1895,  p.  77.)  1314  R.  L. :  5398  C.  0.  S.  1921. 

192.  Loan  or  Investment  Funds.  Every  such  corporation  shall 
lend  (its)  funds  only  on  real  estate  security,  or  on  the  security  of 
its  own  shares  of  stock,  such  loans  being  made  upon  the  terms  and 
conditions  and  in  the  manner  which  shall  be  specified  by  its  by¬ 
laws  No  loans  shall  be  made  on  shares  of  stock  to  an  amount  ex¬ 
ceeding  the  installments  actually  paid  in  on  such  shares.  Such  cor¬ 
poration  may,  however,  employ  a  portion  of  its  capital  stock  in  the 
purchase  of  real  estate  and  the  erection  of  building  thereon,  foij 
rent  or  otherwise.  If  at  any  time  it  shall  happen  that  there  is  no 
demand  by  the  shareholder  for  the  funds  of  the  corporation,  then 
such  funds  may  be  loaned  to  others  who  are  not  shareholders,  at 
such  rate  of  interest  and  premium  as  the  directors  may  fix.  No 
loans  shall  be  made  to  members  or  others  on  personal  security  or  on 
leasehold.  (L.  1895,  p.  78.)  1315  R.  L. :  5399  C  .0.  S.  1921. 

Loans  must  be  made  in  conformity  with  law. 

Aetna  B.  &  L.  Assn.  vs.  Harris,  67  Okla.  257,  170  Pac.  700. 

193.  Matured  Shares.  When  any  unpledged  shares  of  stock 
shall  reach  the  maturity  value  thereof,  all  payments  of  dues  there¬ 
on  shall  cease,  and  the  holders  thereof  shall  be  entitled  to  receive, 
and  shall  then  be  paid  out  of  the  funds  of  such  corporation,  the 
maturity  value  thereof  for  each  share  so  matured  and  held :  Pro¬ 
vided,  however,  that  if  there  are  not  funds  then  on  hand  sufficient 
and  applicable  to  the  payment  and  redemption  of  said  shares,  then 
such  shareholder  shall  be  entitled  to  receive  interest  on  the  sum 
then  due  them,  from  the  date  of  maturity  of  said  shares  to  the  date 
of  redemption,  at  a  rate  of  not  less  than  six  nor  to  exceed  eight 
per  cent  interest  per  annum,  as  may  be  provided  by  the  by-laws 
of  said  association ;  and  provided  further,  that  at  no  time  shall  more 
than  half  of  the  funds  in  the  treasury  be  applicable  to  the  payment 
or  redemption  of  such  matured  shares,  unnless  by  consent  of  the 
board  of  directors.  (L.  18955,  p.  78.)  1316  R.  L. :  5400  C.  O.  S.  1921. 

194.  Minors  and  Married  Women.  It  shall  be  lawful  for  any 
minor  above  the  age  of  fourteen,  or  a  married  woman,  to  take  and 
hold  shares  in  such  corporation,  and  for  such  corporation  to  pay  to 
any  minor  any  money  that  may  be  due  him  in  respect  to  any  shares, 
and  his  receipt  therefor  shall  be  valid ;  but  no  minor  shall  be  eligible 
to  hold  any  office  in  said  corporation.  (L.  1895,  p.  78.)  1317  R  L 
5401  C.  O.  S.  1921. 

195.  Associations  Heretofore  Incorporated.  Any  building  and 
loan  association  which  has  made  and  filed  its  articles  of  incorpora¬ 
tion  under  the  laws  of  the  state  and  received  its  certificate  of  incor¬ 
poration,  and  whose  principal  place  of  business  is  within  the  state, 


Mothersead,  Bank  Comm.,  v. 


96 

shall  be  entitled  to  all  the  benefits  of  all  laws  relating  to  building 
and  loan  associations,  and  have  all  the  powers,  rights  and  privileges 
by  such  laws  conferred,  upon  accepting  the  same  by  unanimous  vote 
of  its  board  of  directors  at  a  regular  meeting  thereof,  and  filing 
with  the  secretary  of  state  a  certificate  of  such  acceptance  in  writ¬ 
ing  under  the  duly  authenticated  seal  of  said  association  to  be  bj 
him  recorded  as  provided  in  Section  1304.  Said  certificate  shall  set 
forth  the  mode  or  plan  of  said  association  in  ncharging  premiums  or 
bonus  for  priority  of  loan,  and  upon  its  acceptance  and  approval  by 
the  secretary  of  state,  he  shall  issue  his  certificate  to  said  corporation 
reciting  the  same,  and  thereafter  said  association  shall  be  conclusive¬ 
ly  deemed  to  have  been  duly  and  legally  incorporated  at  and  from 
the  time  of  the  issuing  of  its  original  certificate  of  incorporation,  and 
the  acts  of  such  associations  not  in  violation  of  law  are  hereby  rat¬ 
tled  and  made  legal.  (L.  1895,  p.  78.)  1318  R.  L. :  5402  C.  O.  S.  1921. 

196.  Exemption  From  Taxation.  The  real  estate,  furniture, 
fixtures  and  all  personal  property,  except  as  otherwise  provided,  of 
mutual  building  and  loan  associations,  organized  and  doing  business 
in  this  state,  shall  be  subject  to  taxation  in'  the  same  manner  and  to 
the  same  extent  as  other  like  property.  The  notes  and  mortgages 
of  building  and  loan  associations  chartered,  organized  and.  doing 
business  in  this  state,  under  the  laws  of  this  state  and  which  are 
given  by  the  members  of  such  association  upon  real  estate  located 
in  the  state,  and  which  real  estate  is  subject  to  taxation  under  the 
laws  of  the  state,  and  the  shares  issued  by  a  building  and  loan  asso¬ 
ciation  loaning  its  funds  to  members  within  this  state,  shall  not  be 
subject  to  taxation.  (L.  1899,  p.  161.)  1391  R.  L. :  5403  C.  0.  S.  1921. 

Old  statute  construed. 

Midland  S.  &  L.  vs.  Nicoll  76  Okla.  27,  183  Pac.  731. 

197.  Section  1.  There  is  hereby  created  a  board  to  be  com¬ 
posed  of  three  members  and  the  Bank  Commissioner  which  shall  be 
designated  as  the  Building  and  Loan  Board. 

C.  28,  L.  1925. 

198.  Section  2.  Such  Building  and  Loan  Board  shall  be  com¬ 
posed  of  the  Bank  Commissioner  who  shall  be  ex  officio  chairman 
thereof  and  three  members  who  shall  be  appointed  by  the  Governor 
of  the  State  by  and  with  the  advice  and  consent  of  the  Senate.  One 
member  of  said  board  shall  be  appointed  for  a  term  of  one  year, 
one  for  a  term  of  two  years  and  cne  for  a  term  three  years.  There¬ 
after  each  of  said  members  shall  be  appointed  to  hold  office  for  a 
term  of  four  years  from  the  dates  of  their  appointments.  Each  of 
said  members  shall  be  citizens  of  the  State  of  Oklahoma  and  shall 
have  had  at  least  three  years  actual  experience  in  the  active  man¬ 
agement  of  building  and  loan  associations  and  shall  be  actively  en¬ 
gaged  in  the  management  of  an  association  during  their  terms  of  of- 


Laws  Gov.  Domestic  and  Foreign  Building  Loan  Ass’n.  97 


fice.  The  members  of  said  board  other  than  the  Bank  Commissioner 
shall  receive  a  compensation  of  Ten  (10.00)  Dollars  per  day  for  each 
day  actually  an  necessarily  consumed  in  the  performance  of  the  du¬ 
ties  of  said  office,  and  in  addition  thereto  shall  be  paid  the  necessary 
expenses  in  the  performance  thereof  which  shall  be  paid  from  the 
revenues  hereinafter  provided.  In  case  of  death,  removal,  resigna¬ 
tion  or  other  vacancy  the  Governor  may  appoint,  according  to  the 
provisions  of  this  Act  and  in  compliance  with  the  qualifications 
herein  prescribed,  some  suitable  person  to  fill  such  unexpired  term. 
Meetings  of  said  board  shall  be  held  monthly  at  the  State  Capitol 
and  special  meetings  may  be  called  at  any  time  by  the  Bank  Com¬ 
missioner.  A  majority  of  the  board  shall  constitute  a  quorum  for 
the  transaction  of  business,  and  in  case  of  a  tie  in  voting  the  Bank 
Commissioner  shall  be  entitled  to  cast  a  vote. 

C.  28  L.  1925. 

199.  Section  3.  The  Bank  Commissioner,  with  the  approval  of 
the  said  board,  is  authorized  to  appoint  not  more  than  three  exam¬ 
iners  to  be  known  as  Building  and  Loan  Auditors,  one  of  whom  may 
be  designated  by  the  Bank  Commissioner  with  the  approval  of  said 
Board  of  Building  and  Loan  Supervisor.  Said  supervisor  must  have 
had  at  least  two  years  actual  experience  in  the  active  work  of  build¬ 
ing  and  loan  associations  and  must  be  a  citizen  of  the  State  of  Ok¬ 
lahoma.  Such  supervisor  shall  receive  a  salary  not  to  exceed  Three 
Thousand  Six  Hundred  (3,600.00)  Dollars  per  year  and  each  audi¬ 
tor  shall  receive  a  salary  of  Two  Thousand,  Four  Hundred  ($2400.- 
00)  Dollars  per  year  for  the  first  year’s  service,  and  for  each  suc¬ 
ceeding  year  thereafter  shall  receive  an  increase  in  salary  Two  Hun¬ 
dred  ($200.00)  Dollars  per  year  until  such  salary  shall  have  reached 
the  sum  of  Three  Thousand  ($3,000.00)  Dollars  per  year,  which  last 
amount  shall  be  the  greatest  compensation  paid  to  any  of  said  au¬ 
ditors.  Said  auditors  shall  be  paid  their  actual  traveling  expenses 
including  railroad  fare,  livery  hire,  telephone,  telegraph  and  hotel 
bills  while  traveling  upon  business  for  said  department;  provided, 
not  more  than  Four  (4.00)  Dollars  per  day,  for  expenses  other  than 
travel,  shall  be  paid.  There  is  hereby  created  the  position  of  filing 
clerk  and  stenographer  who  shall  be  appointed  by  the  Bank  Com¬ 
missioner  and  who  shall  receive  a  salary  of  Fifteen  Hundred  ($1,- 
500.00)  Dollars  per  year.  All  of  said  salaries  provided  for  in  this 
Act  and  all  compensation  and  expenses  authorized  shall  be  payable 
monthly  by  warrants  drawn  by  the  State  Auditor  against  the  special 
fund  hereinafter  provided  for. 

C.  28  L.  1925. 

200.  Section  4.  The  Assistant  Bank  Commissioner  shall  be 
secretary  of  said  Building  and  Loan  Board  and  in  case  of  absence, 
sickness  or  inability  of  the  Bank  Commissioner  to  preside  at  any 


Mothersead,  Bank  Commv  v. 


98 

meeting  of  said  board,  the  Assistant  Bank  Commissioner  shall  act  as 
■chairman  thereof  until  the  Bank  Commissioner  may  be  able  to  re¬ 
sume  his  duties. 

C.  28,  L.  1925. 

201.  Section  5.  Said  board  shall  have  general  supervision  and 
control  over  all  domestic  and  foreign  building  and  loan  associations 
doing  business  in  this  State  and  shall  have  full  power  to  grant  or 
refuse  any  permit  or  license  to  any  association1  to  do  business  in  this 
State  when  such  association  is  not  conducting  its  business  in  con¬ 
formity  with  the  laws  of  the  State  and  the  rules  and  regulations  of 
said  board.  All  by-laws  and  amendments  thereto  of  associations 
heretofore  adopted  shall  be  approved  by  said  board  and  said  board 
shall  have  the  authority  to  approve,  modify  or  reject  any  such  by¬ 
laws  or  amendments  thereto.  Said  board  shall  have  full  power  and 
authority  to  prescribe  all  necessary  and  proper  rules  and  regula¬ 
tions  for  the  conduct  and  operation  of  buliding  and  loan  associa¬ 
tions  in  this  State  and  shall  prescribe  the  manner  in  which  the  books 
and  records  of  associations  doing  business  in  this  State  shall  be  kept 
and  no  building  and  loan  asociations  doing  business  in  this  State 
shall  be  permitted  to  pay  any  dividend  when  it  has  losses  during 
any  year  in  excess  of  its  reserve  and  undivided  profits,  until  such 
losses  shall  have  been  charged  off. 

C.  28,  Li.  1925. 

Rule  adopted  July  1,  1925,  by  Board. 

It  was  ordered  that  each  application  for  permit  to  do  business 
in  the  State  of  Oklahoma  by  a  domestic  corporation  as  a  Building 
and  Loan  Association,  shall  be  accompanied  by  deposit  of  $100.00 
with  the  Bank  Commissioner,  the  same  to  be  used  for  the  purpose 
of  defraying  the  expenses  of  the  necessary  investigation  and  report, 
and  that  each  application  for  permit  to  do  business  as  a  Building 
and  Loan  Association  in  the  State  of  Oklahoma  by  a  foreign  corpor¬ 
ation  shall  be  accompanied  by  a  deposit  of  $500.00  with  the  Bank 
Commissioner  to  be  used  for  the  purpose  of  defraying  the  expenses 
of  the  necessary  investigations  and  report.  Provided  that  the  above 
paragraph  shall  not  apply  to  Building  and  Loan  Associations 
heretofore  authorized  to  do  business  in  the  State. 

Each  Association  doing  business  in  this  State  shall  cause  to  be 
printed,  stamped  or  written,  upon  the  application  for  membership 
and  stock,  the  application  for  a  loan,  and  upon  the  stock  certificate 
and  the  pass  book,  the  amount  of  the  membership  fee,  or  the  with¬ 
drawal  fee,  if  any,  and  all  terns  and  conditions  of  the  entrance  and 
withdrawal  of  such  member  from  said  Association. 

202.  Section  6.  An  examination  of  every  building  and  loan 
association  doing  business  in  this  State  shall  be  required  at  least 
once  each  year.  Said  board  may  require  additional  examinations  to 


Laws  Gov.  Domestic  and  Foreign  Building  Loan  Ass’n.  99 


be  made  at  any  time  when  in  its  judgment  an  examination  may  be 
necessary.  Every  building  and  loan  association  shall  pay  Twenty 
($20.00)  Dollars  per  day  and  actual  expenses  for  each  examiner  for 
actual  time  consumed  in  making  such  examination  and  an  additional 
sum  of  four  cents  per  thousand  dollars  of  the  total  assets  of  such 
association  invested  in  the  State  of  Oklahoma,  as  fees  for  each  ex¬ 
amination  which  shall  be  paid  to  the  State  Treasurer  and  be  held 
and  kept  apart  by  the  State  Treasurer  in  a  special  and  distinct  fund 
which  is  hereby  designated  as  the  building  and  loan  fund.  All  war¬ 
rants  which  may  be  drawn  under  the  terms  of  this  Act  to  pay  ex¬ 
penses,  salaries  or  compensation  provided  for  in  this  Act  shall  be 
drawn  against  and  paid  out  of  said  building  and  loan  fund. 

It  is  hereby  declared  to  be  the  intent  of  the  Legislature  that 
the  necessary  expenses  of  such  supervision,  control  and  examination 
shall  be  paid  by  the  building  and  loan  association  for  the  purpose 
of  meeting  the  necessary  expenses  thereof  and  the  revenues  pro¬ 
vided  in  this  Act  shall  be  kept  and  used  by  the  State  Treasurer 
solely  and  for  the  purpose  only  of  paying  the  expenses  provided 
for  in  this  Act. 

C.  28,  L.  1925. 

Rule  of  Board  adopted  July  1,  1925. 

Section  6  of  Engrossed  Senate  Bill  No.  120  was  interpreted  by 
the  Building  and  Loan  Board  in  part  as  follows:  “That  the  4c  per 
thousand  fee  to  be  collected  on  the  total  assets  of  such  Association 
invested  in  the  State  of  Oklahoma,  shall  be  collected  annually.’ ’ 

203.  Section  7.  Every  foreign  building  and  loan  association  do¬ 
ing  business  in  this  State  shall  conduct  its  business  in  accordance 
with  the  laws  of  this  State  governing  domestic  building  and  loan 
associations.  No  foreign  building  and  loan  association  shall  be 
permitted  to  operate  in  this  State  until  it  has  first  procured  from 
said  board  a  certificate  of  authority  to  so  do  and  such  association 
by  accepting  such  certificate  of  authority  shall  at  all  times  be  subject 
to  the  laws  and  all  rules  and  regulations  governing  domestic  build¬ 
ing  and  loan  associations.  Each  foreign  building  and  loan  associa¬ 
tion  shall  file  with  the  Secretary  of  State  a  certified  copy  of  its 
articles  of  incorporation  and  pay  to  the  Secretary  of  State  the  fees 
required  by  Section  6476.  Compiled  Oklahoma  Statutes,  1921.  All 
laws  relating  to  issue  and  re-issue  of  stock  of  domestic  associations 
shall  apply  to  foreign  associations.  Every  foreign  association  do¬ 
ing  business  in  this  State  shall  keep  on  deposit  with  the  State  Treas¬ 
urer  a  surety  bond,  United  States  Bonds,  State,  county  or  other 
municipal  bonds  to  be  filed  by  said  board  in  the  sum  of  not  less 
than  Ten  Thousand  ($10,000.00)  Dollars  and  not  exceeding  one 
(1%)  per  cent  of  the  assets  of  such  foreign  association  invested  in 
this  State,  provided  that  in  no  event  shall  the  bond  required  ex¬ 
ceed  One  Hundred  Thousand  ($100,000.)  Dollars,  as  a  guarantee  of 


100 


Mothersead,  Bank  Comm.,  v. 


the  faithful  performance  of  its  obligations  under  the  terms  of  its 
contracts  with  citizens  of  this  State,  which  securities  or  bonds 
shall  be  approved  by  the  Bank  Commissioner. 

C.  28,  Li.  1925. 

Rule  adopted  by  Board  July  1,  1925. 

It  was  ordered  that  each  application  for  permit  to  do  business 
in  the  State  of  Oklahoma  by  a  domestic  corporation  as  a  Build¬ 
ing  and  Loan  Association,  shall  be  accompanied  by  deposit  of 
$100.00  with  the  Bank  Commissioner,  the  same  to  be  used  for  the 
purpose  of  defraying  the  expenses  of  the  necessary  investigation 
and  report,  and  that  each  application  for  permit  to  do  business 
as  a  Building  and  Loan  Association  in  the  State  of  Oklahoma  by 
a  foreign  corporation  shall  be  accompanied  by  a  deposit  of  $500.00 
with  the  Bank  Commissioner  to  be  used  for  the  purpose  of  defraying 
the  expenses  of  the  necessary  investigations  and  report.  Provided 
that  the  above  paragraph  shall  not  apply  to  Building  and  Loan 
Associations  heretofore  authorized  to  do  business  in  the  State. 

204.  Section  8.  Building  and  Loan  associations  may  borrow  money 
for  any  of  its  corporate  purposes,  not  to  exceed  however,  fifteen 
(15%)  per  cent  of  its  total  assets,  and  may  issue  unsecured  evi¬ 
dence  of  indebtedness  therefor;  and  such  associations  may  borrow 
from  and  lend  to  like  associations  upon  the  approval  of  the  board 
of  directors  of  both  the  borrowing  and  lending  associations,  togeth¬ 
er  with  the  approval  of  the  Bank  Commissioner. 

C.  28,  L.  1925. 

Rule  of  Board  adopted  July  1,  1925. 

Section  8,  Senate  Bill  No.  120,  was  interpreted  to  mean  that 
the  maximum  amount  any  Association  may  borrow  from  any  and 
all  sources  shall  be  limited  to  15%  of  its  total  assets.  Further 
that  where  the  borrowing  is  to  be  from  a  like  Association,  full  de¬ 
tails  of  the  loan  must  be  approvel  by  the  Board  of  Directors  of 
each  Association  and  have  the  approval  of  the  Bank  Commissioner 
before  said  loan  is  consummated. 

205.  Section  9.  Any  association  in  this  State,  may,  with  the  ap¬ 
proval  of  its  board  of  directors,  sell,  assign,  or  transfer  without 
recourse  any  notes  and  mortgages  given  to  secure  the  same  to  a  jun¬ 
ior  lien-holder  when  the  terms  of  such  mortgage  have  been  broken 
and  the  same  is  subject  to  foreclosure. 

C.  28,  L.  1925. 

206.  Section  10.  When  it  shall  appear  to  the  Bank  Commissioner, 
after  an  examination  of  the  affairs  and  conditions  of  a  building 
and  loan  association,  that  such  association  is  insolvent,  the  Bank 
Commissioner  shall  with  the  approval  of  a  majority  of  the  Build¬ 
ing  and  Loan  Board,  take  possession  thereof  and  all  of  its  property 
and  assets  for  the  purpose  of  winding  up  its  affairs  and  paying  the 


Laws  Gov.  Domestic  and  Foreign  Building  Loan  Ass’n.  101 


•creditors  thereof.  For  the  purpose  of  liquidation  the  Bank  Com¬ 
missioner  may  appoint  such  liquidating  agent  or  agents,  attorneys 
and  employees  that  may  be  necessary  in  winding  up  the  affairs 
•of  such  insolvent  association.  All  liquidating  agents  and  employees, 
shall,  before  entering  upon  the  duties  of  their  office,  execute  to 
the  State  of  Oklahoma  a  fidelity  bond  in  such  amount  as  the  Bank 
Gommissioner  shall  designate  which  shall  be  approved  by  the  Bank 
Commissioner  and  filed  in  his  office.  The  bond  of  such  agent  shall 
be  conditioned  upon  the  faithful  performance  of  all  duties  required 
of  such  agents  and  employees  and  the  faithful  accounting  to  the 
Bank  Commissioner  for  all  monies,  funds  and  assets  that  shall 
come  into  possession  of  such  agent  upon  demand  of  the  Bank  Com¬ 
missioner.  The  compensation  of  such  liquidating  agent  or  em¬ 
ployees  shall  not  exceed  the  sum  of  Four  Thousand  ($4,000.00) 
Dollars  per  yeaer.  Such  liquidating  agents  and  attorneys  shall  hold 
office  at  the  will  an  pleasure  of  the  Bank  Commissioner  and  such 
liquidating  agents  shall  submit  to  the  Bank  Commissioner  and  ac¬ 
count  duly  verified  each  month,  giving  in  detail  a  statement  of  all 
receipts  and  disbursements  made  from  the  assets  in  their  possession, 
and  each  three  months  after  appointment  such  liquidating  agent 
shall  file  in  the  District  Court  of  the  county  in  which  said  associa¬ 
tion  was  located  a  complete  statement,  setting  forth  in  detail  items 
of  receipts  and  disbursements  out  of  the  assets  of  such  association, 
and  no  payments  shall  be  madei  from  such  assets  except  upon  writ¬ 
ten  order  of  the  Bank  Commissioner. 

The  Bank  Commissioner  shall  have  power  and  authority  to  in¬ 
stitute  and  prosecute  all  necessary  suits  for  the  purpose  of  liqui¬ 
dation  of  any  insolvent  association  taken  over  by  the  Bank  Com¬ 
missioner,  and  such  suits  shall  be  brought  in  the  name  of  the  State 
of  Oklahoma,  on  the  relation  of  the  Bank  Commissioner,  and  no 
costs  shall  be  required  and  the  State  of  Oklahoma  shall  not  be 
liable  for  any  costs  in  the  prosecution  of  said  suits.  After  complete 
liquidation  of  an  insolvent  association  and  when  the  creditors  there¬ 
of  shall  have  been  paid  in  full,  if  there  remain  in  the  hands  of  the 
Bank  Commissioner  any  assets,  such  assets  remaining  shall  revert 
to  the  stockholders  and  be  surrendered  by  the  Bank  Commissioner 
to  such  stockholders  of  said  insolvent  association.  The  Bank  Com¬ 
missioner  shall  have  authority,  by  and  with  the  consent  of  the 
District  Court  or  a  judge  thereof  in  the  county  in  which  an  insol¬ 
vent  association  is  located  to  compound  bad  or  doubtful  debts. 

C.  28,  L.  1925. 

207.  Section  11.  Any  association  authorized  to  do  business  in  the 
State  of  Oklahoma  is  authorized  to  charge  not  to  exceed  one 
<1%)  per  cent  of  the  par  value  of  each  share  of  stock 
issued  which  may  be  designated  by  such  association  as  a  member¬ 
ship  fee,  a  cancellation  fee,  or  a  withdrawal  fee,  subject  however, 
to  such  regulations  as  may  be  provided  by  the  Building  and  Loan 


102  Mothersead,  Bank  Commv  y. 

Board.  In  no  case  shall  such  fee  charged  against  the  funds  paid 
in  by  the  shareholder  be  greater  than  one  (1%)  per  cent  of  the 
par  value  of  every  share  issued  as  herein  provided. 

C.  28,  L.  1925. 

208.  Section  12.  Section  5350  of  Compiled  Oklahoma  Statutes, 
1921,  shall  have  no  application  to  buildipg  and  loan  associations 
doing  business  in  this  State. 

C.  28,  L.  1925. 

209.  Section  13.  The  members  of  the  Building  and  Loan  Board 
provided  for  herein  shall  be  subject  to  removal  and  be  removed 
from  office  in  the  manner  and  for  the  causes  specified  in  Chapter 
7,  Article  4,  Compiled  Laws  of  Oklahoma  1921. 

C.  28,  Ii.  1925. 

210.  Section  14.  All  acts  and  parts  of  acts  in  fonflict  herewith 
be  and  the  same  are  hereby  repealed.  It  is  provided  further  that 
in  case  any.  section  or  paragraph  of  this  Act  shall  be  declared  in¬ 
valid,  such  invalidity  shall  not  affect  the  remaining  portions  of  tho 
said  Act. 

C.  28,  I..  1925. 

211.  Building  and  Loan  Auditor.  The  Building  and  Loan 
Auditor,  as  now  provided  by  law,  shall  be  a  citizen  of  this  state, 
and  shall  have  had  at  least  three  years’  actual  experience  in  man- 
aging  Building  and  Loan  Associations. 

5418  C.  O.  S.  1921:  L.  1913,  p.  445. 

Prior  to  this  act,  loans  must  be  by  competitive  bidding-. 

Union  Saving’s  Assn.  vs.  Cummins,  78  Okla.  265,  190  Pac.  869. 

212.  Subject  to  Bank  Commissioner.  Any  building  and  loan 

association  now  existing,  or  hereafter  organized  under  the  laws  of 
the  State  of  Oklahoma,  and  all  foreign  building  and  loan  associa¬ 
tions  doing  business  in  the  State  of  Oklahoma,  or  any  person,  part- 
nership  or  corporation  engaged  in  the!  business  of  disposing  of  con¬ 
tracts  on  the  partial  payment  plan,  shall  be  subject  to  the  super¬ 
vision  of  the  Bank  Commissioner :  Provided  that  the  provisions  of 
this  act  shall  not.  apply  to  any  person,  partnership  or  corporation, 
domestic  or  foreign,  engaged  in  the  business  of  a  money  lender 
where  either  the  principal  or.  interest  of  such  money  loaned  is  paid 
by  installments  on  the  partial  payment  plan  and  where  no  stock 
or  certificate  of  interest  in  such  business  is  issued  to  the  borrower 
oi  m  consideration  of  the  money  loaned ;  Provided,  however,  that 
t  e  provisions  of  this  act  shall  apply  to  all  persons,  firms  or  cor¬ 
porations  doing  a  business  of  selling  contracts  upon  which  to  predi¬ 
cate  or  base  a  loan  at  some  future  date. 


liAws  Gov.  Domestic  and  Foreign  Building  Loan  Ass’n.  103 


5419  C.  O.  S.  1921;  L.  1913  p.  116. 

By  Laws  must  be  approved  by  Bank  Commissioner. 

McGuire  vs.  Assn.  112  Okla.  158,  240  Pac.  722. 

213.  Issue  of  Stock  and  Reports.  Any  Building  and  Loan 
Association  doing  business  in  the  State  of  Oklahoma  may  issue  its 
stock  in  full-paid,  prepaid  or  installment  shares,  in  such  amount 
and  at  such  times  and  in  such  manner  as  the  by-laws  may  provided, 
and  each  Building  and  Loan  Association,  or  other  person,  partner¬ 
ships  or  corporations  coming  under  the  provisions  of  this  Act  shall 
file  with  the  Bank  Commissioner  a  certified  copy  of  its  charter, 
constitution  and  by-laws,  and  its  plan  of  conducting  business,  to¬ 
gether  with  a  statement,  verified  by  oath  of  its  president  and  secre¬ 
tary,  showing  the  amount  of  authorized  capital  stock,  assets  and  lia¬ 
bilities,  the  kind  and  character  of  the  same,  together  with  any 
other  information  which  may  be  required,  which  statement,  veri¬ 
fied  by  oath,  shall  be  filed  semi-annually  thereafter.  And  any  such 
Building  and  Loan  Association  may  charge  a  fee  of  not  to  exceed 
$5.00  for  examining  each  piece  of  real  estate  mortgaged  to  such 
association  to  secure  a  loan. 

5420  C.  O.  S.  1921;  L.  1913  p.  445. 

Rule  of  Board  adopted  July  1,  1925. 

Every  Building  and  Loan  Association  doing  business  in  this 
■State  whether  heretofore  or  hereafter  organized,  shall  accumulate 
from  its  earnings  a  “ reserve  fund”,  for  the  payment  of  losses,  and 
at  least  five  per  cent  of  the  neL  earnings  shall  be  set  aside  at  each 
dividend  paying  period  to  such  fund  until  said  fund  amounts  to  5 
per  cent  of  the  total  assets.  All  losses  shall  be  paid  out  of  such 
fund  and  said  fund  shall  be  a  reserve  fund  used  for 
the  payment  of  losses  only,  and  whenever  the  amount  in  such 
fund  falls  below  5  per  cent  of  the  total  assets  as  aforesaid,  it  shall 
be  replenished  by  appropriations  of  at  least  5  per  cent  of  the  net 
earnings  as  hereinbefore  provided  until  it  again  reaches  such 
amount.  Any  sums  heretofore  transferred  to  the  reserve  fund 
of  any  association  shall  constitute  its  “reserve  fund”  when  this 
regulation  takes  effect. 

214.  Loaning  Money  Without  Bids.  Section  17,  Article  17, 
Chap.  17,  Statute  1893,  is  hereby  amended  to  read  as  follows :  Any 
such  Association  may,  by  its  by-laws,  dispense  with  the  offering  of 
its  moneys  for  bids,  and  in  lieu  thereof  loan  or  advance  its  moneys  to 
members  at  such  rate  of  interest  or  interest  and  premium  as  may  be 
provided  by  the  by-laws.  Such  premium  to  be  paiad  in  installments 
shall  not  be  deemed  usurious,  but  shall  be  taken  to  be  the  payment  as 
it  falls  due,  and  the  same  shall  be  lawful,  in  so  far  as  the  said  prem¬ 
ium,  together  with  interest,  shall  not  exceed  one  per  cent  per  month. 


104 


Mothersead,  Bank  Comm.,  v. 


215.  Bank  Commissioner’s  Certificate.  Any  Building  and  Loan 

Association  now  existing,  or  hereafter  organized  under  the  laws  of 
the  State  of  Oklahoma,  or  any  foreign  Building  and  Loan  Associa¬ 
tion,  person,  partnership  or  corporation  engaged  in  the  business  of 
disposing  of  contracts  of  stocks  on  the  partial  payment  plan  must 
first  secure  a  certificate  of  authority  from  the  Bank  Commissioner,, 
before  is  can  transact  any  business  in  the  State  of  Oklahoma.  5422 
C.  0.  S.  1921,1  L.  1913  p.  446. 

216.  Same— Terms  of  and  Fees.  Certificates  of  authority  is¬ 
sued  to  Building  and  Loan  Associations  now  existing,  or  organized 
under  the  laws  of  the  State  of  Oklahoma,  shall  be  for  the  period 
of  six  months,  and  if  such  association  shall  be  solvent,  and  shall 
be  doing  and  intending  to  transact  a  legitimate  business,  and  have 
not  violated  any  of  the  provisions  of  law,  it  shall  be  the  duty  of 
the  Bank  Commissioner  to  issue  certificates  for  each  subsquent  six 
months  period,  upon  the  payment  of  Two  and  50-100  ($2.50)  Dol¬ 
lars  to  the  Bank  Commissioner,  and  thereupon  such  Building  and 
Loan  Association  shall  be  duly  authorized  to  transact  a  building  and 
loan  business  in  any  county  in  the  State  of  Oklahoma,  during  the 
period  for  which  said  certificate  of  authority  is  issued,  unless  soon¬ 
er  revoked.  5423  C.  O.  S.  1921  L.  1913  p.  447. 

217.  Examination  by  Bank  Commissioner.  The  Bank  Com¬ 
missioner  shall,  at  least  once  each  year,  or  oftener,  if  he  deems  nec¬ 
essary,  investigate  the  conditions  of  all  Building  and  Loan  Associa¬ 
tions,  and  all  other  persons,  partnerships  or  corporations  included 
in  this  Act  which  may  be  doing  business  in  the  State  of  Oklahoma,, 
and  shall,  for  the  purpose  of  making  such  examinations,  have  all  the 
rights  and  powers  to  do  and  perform  all  things  necessary  to  make 
such  examinations  as  is  now  given  to  the  examiner  of  State  banks- 
5424  C.  0.  S.  1921,  L.  1913  p.  447. 

218.  Voluntary  Liquidation.  No  such  association,  whether 
heretofore  or  hereafter  organized  in  this  state,  shall  cease  to  du 
business  or  endeavor  to  liquidate  its  affairs  prior  to  the  maturity  of 
all  of  its  stock,  except  by  and  with  the  consent  of  the  stockholders- 
representing  seventy-five  per  cent  of  its  capital  stock.  The  liquida- 
tion  of  any  Building  and  Loan  Association  shall  be  under  the  super¬ 
vision  of  the  Bank  Commissioner.  It  shall  be  unlawful  for  such 
association  to  make  a  voluntary  general  assignment  of  its  business 
affairs,  and  if  it  is  discovered  to  be  in  failing  condition,  the  offi¬ 
cers  and  directors  thereof  shall  immediately  place  it  in  the  hands 
of  the  Bank  Commissioner.  But  should  the  officers  and  directors 
of  an  association  make  an  attempt  to  make  a  voluntary  general 
assignment  of  its  assets,  Bank  Commissioner  shall,  as  soon  as  prac¬ 
ticable,  by  a  thorough  examination  into  its  affairs,  its  actual  fi¬ 
nancial  condition,  and  if,  in  his  opinion,  the  association  is  solvent 


Laws  Gov.  Domestic  and  Foreign  Building  Loan  Ass’n.  105 

and  can  be  place  din  condition  to  resume  business  to  the  benefit  of 
its  creditors  and  stockholders,  he  shall  proceed  to  conduct  and  man¬ 
age  its  affairs,  but  if  he  shall  become  satisfied  that  the  association 
is  insolvent  and  cannot  resume  business,  he  shall  immediately  in¬ 
stitute  proceedings  in  the  proper  court  to  have  a  receiver  appointed 
for  such  association,  and  shall  proceed  to  wind  up  its  affairs  and 
business  for  the  benefit  of  its  credtors  and  stockholders.  For  his 
service  in  managing  and  conducting  the  affairs  of  an  insolvent  assoc¬ 
iation  he  shall  receive  reasonable  compensation,  not  to  exceed 
two  and  one-half  per  cent  of  its  assets,  which,  together  with  his 
necessary  expenses,  is  to  be  paid  out  of  said  assets. 

5427  C.  O.  S.  1921,  L.  1913,  p.  448. 

Note:  This  section  is  modified  as  to  insolvency  by  Sec.  10,  C.  28, 

L.  1925. 

219.  False  Swearing.  If  any  president  or  secretary  or  other 
person  swear  falsely  as  to  any  material  fact  in  the  affidavit  required 
by  this  service,  such  person  shall  be  guilty  of  false  swearing.  5429 
C.  0.  S.  1921. 

Fees  to  the  State  Treasurer. 

Section  14.  All  fees  and  penalties  collected  herein  shall  be 
paid  to  the  Bank  Commissioner,  which  shall  be  paid  to  the  State 
Treasurer  for  the  benefit  of  the  state.  5430  C.  0.  S.  1921. 

220.  Penalties.  Any  person,  firm  or  corporation  violating  any 
provisions  of  this  Act  shall  be  guilty  of  a  misdemeanor  and  upon 
conviction  thereof,  shall  be  fined  in  any  sum  not  less  than  One 
Hundred  ($100.00)  Dollars,  nor  more  than  One  Thousand  ($1,000) 
Dollars,  and  in  the  event  that  the  provisions  of  this  Act  has  been 
violated  by  any  person,  he  may  be  punished  in  addition  to  the  above 
and  foregoing  by  imprisonment  in  the  county  jail  for  not  less  than 
thirty  (30)  days,  nor  more  than  six  months.  5431,  C.  O.  S.  1921. 

221.  Privilege  of  Investment  in  Federal  Farm  Loan  Bonds. 

Section  1  (Senate  Bill  315,  S.  L.  1917,  p.  93).  Any  trust  com¬ 
pany,  building  and  loan  association,  insurance  company  or  bank¬ 
ing  company,  organized  under  the  laws  of  the  State  of  Oklahoma, 
may  invest  its  funds  in  Federal  Farm  Loan  Bonds  issued  under 
the*  provisions  of  the  Act  of  Congress,  approved  July .17,  1916,  and 
any  foreign  corporation  which,  under  the  laws  of  this  state,  is  re¬ 
quired  to  deposit  securities  in  the  office  of  the  State  Treasurer  in 
order  to  do  business  in  this  state,  may  deposit  such  Federal  Farm 
Loan  Bonds  in  lieu  of  any  other  security  required  by  law  to  be 
so  deposited.  The  officers  having  charge  of  any  sinking  fund  in 
this  state,  or  any  county,  city,  town,  township  or  school  district 
thereof,  may  invest  the  sinking  fund  of  the  state  or  of  such  county, 
city,  town,  township  or  school  district  in  Federal  Farm  Loan  Bonds, 
and’said  bonds  shall  constitute  security  for  the  deposit  of  any  public 
funds  and  be  for  the  investment  of  trust  funds. 

8586  C.  O.  S.  1921. 


106 


Mothersead,  Bank  Commv  v. 


FOREIGN  BUILDING  AND  LOAN  ASSOCIATIONS 

222.  Certificate  of  Authority.  All  foreign  building  and  loan 
associations  and  all  other  corporations  or  associations  of  persons,  in- 
corporated,  organized  residing  or  having  their  place  of  business  out¬ 
side  ot  the  State  of  Oklahoma  and  transacting  a  building  and  loan 
usmess  in  the  State  of  Oklahoma,  by  whatever  name  they  mav  be 
known,  shall  conduct  such  business  in  the  state  in  accordance  with 
this  article,  and  no  such  building  and  loan  association  shall  have  au¬ 
thority  to  transact  any  business  in  this  state  until  it  shall  procure 
±rom  the  Bank  Commissioner  of  this  state  a  certificate  of  authority 
so  to  do  To  procure  such  cerificate,  such  building  and  loan  assoeia^ 
non  shall  comply  with  the  provisions  of  this  articde  (L.  1905,  p.  157) 

1320  R.  L. :  5404  C.  O.  S.  1921. 

Note:  C.  28,  L.  1925,  seem  to  modify  this  but  not  repeal  it. 

County  does  not  require  that  foreign  corporation  be  allowed  to  en¬ 
force  contracts  in  conflict  with  state  laws. 

Holt  vs.  Aetna  B.  &  L.  Assn.  78  Okla.  308,  190  Pac.  873. 

•  i-223'1  ?yt,ifled.  C°py  of  Charter.  Each  building  and  loan  asso¬ 
ciation  shall  file  with  the  bank  commissioner  a  certified  copy  of  its 
charter,  constitution,  by-laws  and  all  other  rules  and  regulations, 
showing  its  manner  of  conducting  business,  together  with  a  state¬ 
ment,  verified  by  the  oath  of  the  president  or  managing  officer 
showing  the  amount  of  capital  stock,  assets  and  liabilities,  and  the 
kind  or  character  of  the  same;  which  statement,  verified  by  oath 
shall  be  filed  semi-annually  thereafter  and  the  certificate  of  the 
bank  commissioner  shall  be  good  for  six  months  only  from  date 
thereof ;  and  no  provision  of  either  the  constitution,  by-laws  or 
rules  and  regulations  shall  be  of  any  force  or  effect  or  be  binding 
upon  any  person  doing  business  with  such  association  until  a  cer- 
lfied  and  verified  copy  of  same  has  been  filed  with  and  approved 
by  said  bank  commissioner  and  the  provisions  of  this  section  fully 
complied  with ;  if  any  president  or  managing  officer  of  such  build¬ 
ing  and  loan  association  swear  falsely  in  the  affidavit  required  in 
tins  section,  he  shall  be  guilty  of  perjury.  1322  R.  L.:  5406  C.  O. 

224.  County  Agents  to  be  Appointed.  Each  building  and  loam 

association  shall  file  with  the  bank  commissioner  a  written  state¬ 
ment,  duly  executed,  naming  a  person  in  each  county  as  its  agent 
upon  whom  service  of  summons  and  all  other  legal  process  can  be 
had,  and  m  the  event  of  failure  of  such  building  and  loan  associa¬ 
tion  to  name  such  agent  m  any  county  or  counties,  the  bank  com¬ 
missioner  shall  limit  by  its  certificate  of  authority  to  such  building 
and  loan  association  issued,  the  territory  in  which  same  can  tran£ 
act  business  to  the  counties  in  which  agents  are  named.  (L.  1905 

I  a  1 


Foreign  Building  and  Loan  Association 


107 


1323  R.  L.:  5407  C.  O.  S.  1921. 

225.  Fee  For  Certificate.  In  order  to  obtain  the  certificate  of 
authority  to  transact  business  in  this  state,  as  heretofore  referred 
to,  each  building  and  loan  association  shall,  in  addition  to  meeting 
the  requirements  of  other  sections  of  this  article,  file  with  the  state 
bank  commissioner  an  application  in  writing  for  such  permit  and 
shall  accompany  same  with  a  fee  of  ten  dollars,  which  fee  shall 
be  retained  and  not  refunded  in  any  case  by  the  bank  commissioner. 
If  such  bank  commissioner  is  satisfied  that  such  building  and  loan 
association  is  solvent  and  is  doing  and  intends  to  transact  a  legit¬ 
imate  business,  and  has  not  violated  any  of  the  provisions  of  this 
article,  he  shall,  when  all  the  requirements  of  this  article  have  been 
fully  complied  with,  issue  to  such  building  and  loan  association  a 
certificate  of  authority  to  transact  business  for  the  period  of  six 
months  from  date  of  such  certificate ;  and  until  such  certificate  of 
authority  is  issued  no  building  and  loan  association  shall  have  au¬ 
thority  to  transact  business  in  this  state,  except  to  close  up  its 
business.  (L.  1905,  p.  158.)  See  Note  (1)  R.  L.  5408  C.  0.  S.  1921. 

226.  Commissioner  To  Examine.  The  bank  commissioner  may 
at  any  time  investigate  the  condition  of  any  building  and  loan  asso¬ 
ciation  doing  business  in  this  state,  and  he  shall  for  the  purpose 
of  making  such  examination  have  all  the  rights  and  powers  to  per¬ 
form  all  things  necessary  to  make  such  examination  as  he  is  now 
given  in  the  examination  for  banks  in  this  state.  Whenever  the 
bank  commissioner  ascertains  that  any  building  and  loan  association 
is  insolvent  or  in  a  failing  condition  or  that  it  has  violated  any  of 
the  provisions  of  this  article,  it  shall  be  his  duty  to  revoke  the  certi¬ 
ficate  of  authority  of  such  building  and  loan  association,  and  there¬ 
after  it  shall  have  no  authority  to  transact  any  further  business  in 
this  state  except  to  wind  up  the  old  business  on  hand  necessary  to 
the  closing  up  and  dissolution  of  its  business  in  its  (this)  state  and 
upon  revocation  of  its  authority  to  do  business  in  this  state  all  obli¬ 
gations  and  debts  owing  by  such  building  and  loan  association,  in¬ 
cluding  all  notes,  bonds  or  other  indebtedness,  shall  at  once  become 
due  and  payable.  After  the  bank  commissioner  has  revoked  such 
certificate  of  authority,  he  shall  have  the  right  and  authority  to  is¬ 
sue  a  new  certificate  upon  the  building  and  loan  association  com¬ 
plying  with  all  the  requirements  of  this  article  and  doing  and  per¬ 
forming  all  things  which  were  necessary  for  the  same  to  receive 
its  first  certificate  of  authority  hereunder  and  satisfying  the  bank 
commissioner  that  it  had  remedied  all  wrongs  by  it  committed  by 
a  violation  of  this  article,  and  paying  to  sai  dbank  commissioner  for 
such  examination  and  renewal  of  authority  the  sum  of  twenty-five 
dollars  as  his  fee.  (L.  1905,  p.  159.)  See  Note  (2). 

1325  R.  L.  5409  C.  O.  S.  1921.  C.  28  L.  1925  provide  for  a  complete 
liquidation  in  event  of  insolvency. 


108 


Mothersead,  Bank  Commv  v. 

227.  Usurious  Interest  Prohibited. 

Section  1.  That  Section  1326  of  the  Revised  Laws  of  Okla¬ 
homa,  1910,  be  amended  so  as  to  read  as  follows : 

Section  1326.  Any  rate  charged  by  a  foreign  building  and 
loan  association  on  account  of  interest  or  interest  and  premiums  in 
excess  of  ten  per  cent  per  annum  upon  the  amount  loaned  by  such 
building  and  loan  association  which  may  be  computed  and  collected 
monthly,  shall  be  usurious  and  subject  such  company  or  association 
to  the  penalties  for  usury  provided  by  the  laws  of  the  state.  In 
estimating  the  amount  of  money  paid  by  any  borrower  upon  such 
loan  in  order  to  determine  whether  same  is  usurious  there  shall  be 
included  all  interest  premiums  and  all  money  paid  to  the  company 
or  its  agent  as  commission,  or  in  any  other  manner  to  procure  such 
loan,  except  as  hereinafter  provided.  Payments  made  by  the  bor¬ 
rower  as  dues  on  installments  on  shares  of  stock  belonging  to  the 
boi  rower,  in  the  building  and  loan  association,  shall  not  be  com¬ 
puted  as  interest  on  the  loan:  Provided,  that  such  building  and 
loan  association  may  charge  a  fee  not  to  exceed  five  dollars  for  ex¬ 
amination  of  title,  and  a  membership  fee  not  exceeding  one  per 
cent  upon  the  amount  of  such  loan  fees  for  recording  the  mortgage 
or  obligation,  and  a  fee  of  fifty  cents  per  month  for  each  month 
that  dues  are  delinquent.”  (Chap.  283,  S.  L.  1915,  p.  542.)  5410 
C.  0.  S.  1921.  y  ' 

Foieign  corporation  complying  with,  state  law  may  enforce  contract  and 
same  not  usurious. 

Midland  S.  &  L.  vs.  Landrum  71  Okla.  115,  175  Pac.  544. 

227-a.  Loans  by  Foreign  Associations.  Any  resident  of  this 

state  who  may  purchase  stock  in  any  such  building  and  loan  asso¬ 
ciation  with  the  object  and  purpose  of  obtaining  a  loan  of  money 
from  such  building  and  loan  association,  and  shall  at  the  time  of 
subscribing  for  such  stock  sign  a  written  or  printed  application  for 
such  loan  and  either  deliver  such  application  to  the  agent  of  such 
foreign  association,  who  has  obtained  his  subscription  for  stock 
or  who  may  mail  his  application  for  a  loan  of  money  direct  to  the1 
home  office  of  such  building  and  loan  association,  shall,  upon  com¬ 
plying  with  all  the  by-laws,  rules  and  regulations  of  such  associa¬ 
tion,  which  are  not  in  conflict  with  this  article,  be  entitled  to  a 
loan  of  money  not  to  exceed  the  par  value  of  his  stock  in  such  for¬ 
eign  association.  If  such  foreign  association  shall  not,  within  sixty 
days  from  the  date  of  such  application  for  loan  from  such  stock¬ 
holder,  close  up  such  loan  and  pay  over  the  proceeds  thereof  to 
such  borrower,  less  the  expenses  therein  mentioned,  and  all  prior 
liens  on  the  real  estate  he  proposes  to  mortgage  to  such  foreign 
association,  to  secure  such  loan,  then  and  in  that  event  such  for¬ 
eign  association  shall  pay  back  to  such  proposed  borrowing  stock- 

holed  all  money  paid  for  stock  to  such  foreign  association  or  its 
agent.  (L.  1905,  p.  161). 


Foreign  Building  and  Loan  Asssociation 


109 


See.  1S28  R.  L.  5412  C.  O.  S.  1921. 

Applied: 

Midland  Savings  Assn.  vs.  Improvement  Co.  34  Okla.  564,  126  Pac. 

720. 

228.  Shareholders  May  Withdraw.  Any  shareholder  or  the 
legal  representative  of  any  shareholder  wishing  to  withdraw  from 
such  building  and  loan  association  shall  have  the  right  and  power 
to  do  so  at  any  time.  In  order  to  perfect  such  withdrawal,  it  shall 
be  necessary  for  such  person  to  surrender  to  such  made  in  writing 
by  such  person  of  such  building  and  loan  association,  or  of  or  upon 
any  agent  of  such  association,  such  person  shall,  if  judgment  be 
obtained,  be  entitled  to  recover  in  addition  to  the  amount  of  judg¬ 
ment  an  all  costs  of  his  action,  a  reasonable  attorney’s  fee,  to  be 
fixed  by  the  court  rendering  judgment.  (L.  1905,  p.  162). 

1327  R.  L.  5411  C.  O.  S.  1921. 

Note:  Sec.  11  C.  28  L.  1925  appears  to  have  repealed  a  part  of  this 

section  regarding  withdrawal. 

Partial  withdrawals  not  permitted.  See  Sec.  172,  this  compilation. 

229.  “Resident”  Defined.  Whenever  the  words  “resident  of 
this  state”  are  used  in  this  article,  they  shall  be  construed  to  include 
all  persons  who  have  real  estate  in  this  state  pledged  as  security 
for  the  payment  of  any  obligation  to  such  building  and  loan  associa¬ 
tion.  (L.  1905,  p.  163). 

1330  R.  L.  5414  C.  O.  S.  1921. 

230.  Unlawful  Soliciting — Penalty.  Any  person  who  shall 
represent  or  solicit  business  for  any  building  and  loan  association  in 
this  state  which  is  not  authorized  to  transact  business  herein,  shall 
be  guilty  of  a  misdemeanor,  and  upon  conviction  shall  for  the  first 
offense  be  punished  by  a  fine  of  not  less  than  twenty-five  dollars 
nor  more  than  five  hundred  dollars,  and  upon  conviction  of  the 
second  offense  shall  be  punished  by  a  fine  of  not  less  than  two  hun¬ 
dred  and  fifty  dollars  and  not  more  than  five  hunudred  dollars,  and 
shall  be  committed  to  jail  for  a  period  of  not  to  exceed  one  year. 
(L.  1905,  p.  163).  1331  R.  L.  5415  C.  O.  S.  1921. 

231.  Transacting  Business  Without  Certificate.  Any  building 
and  loan  association  which  shall  transact  business  in  this  state 
without  having  first  obtained  a  certficate  of  authority  therefor  as 
provided  in  this  article,  shall  forfeit  any  pay  to  the  State  of  Okla¬ 
homa,  to  be  recovered  in  a  civil  action  in  the^  name  of  the  State  of 
Oklahoma,  the  sum  of  five  thousand  dollars.  (  L.  1905,  p.  163.) 
1332  R.  L.:  5416  C.  O.  S.  1921. 

Note:  C.  28  L.  1925  seems  to  amend  this  section  so  far  as  obtaining 

permit  only. 

232.  Compliance  Required.  All  foreign  building  and  loan  asso¬ 
ciations  doing  business  in  this  state  shall  comply  with  the  require¬ 
ments  of  this  article;  and  no  building  and  loan  association  nshall  he 


110 


Mothersead,  Bank  Comm.,  y. 

permitted  to  transact  business  in  this  state  until  certificate  of  au¬ 
thority  has  been  obtained  in  accordance  with  the  provisions  hereof 
(L.  1905,  p.  163.)  1333  R.  L.  5417  C.  0.  S.  1921. 

Note:  C.  28  L.  1925  has  changed  this  section  and  permit  must  be  ob¬ 
tained  from  Board. 

233.  Construction  of  Article.  This  article  shall  not  be  con¬ 
strued  to  apply  or  repeal  or  effect  the  laws  of  the  State  of  Okla¬ 
homa  regarding  domestic  building  and  loan  associations:  Provided, 
that  if  any  domestic  building  and  loan  association  carries  on  its 
business  outside  of  the  county  in  whch  its  prncpal  place  of  busi¬ 
ness  is  located,  then  such  association  shall  be  governed  and  regulat¬ 
ed  by  this  article.  (L.  1905,  p.  164).  1334  R.  L. 

Note:  This  law  with  regard  to  Foreign  Corporations  is  greatly  mod¬ 
ified  and  control  thereof  is  fixed  by  law  in  the  Board 
C.  28  L.  1925. 


BLUE  SKY  LAW 

234.  Speculative  Securities.  The  term  “  Securities  ”  as  used 
in  this  Act  shall  be  taken  to  mean  stock  certificates,  shares,  bonds, 
debentures,  certificates  of  participation,  membership  contracts,  con¬ 
tracts  or  bonds  for  the  sale  and  conveyance  of  land  on  deferred  pay¬ 
ments  or  installment  plan,  or  other  instrument  in  the  nature  thereof 
by  whatsoever  name  known  or  called  and  including  the  capital 
stock  of  any  and  all  corporations  offering  the  same  for  sale.  The 
term  speculative  securities”  as  used  in  this  Act  shall  be  taken  to 
mean  and  include,  (1)  All  securities  to  promote  or  induce  the  sale 
of  which,  profit,  gain  or  advantage  unusual  in  the  ordinary  course 
of  legitimate  businenss  is  in  any  way  advertised  or  promised;  (2) 
All  securities  for  promoting  the  sale  of  which  a  commission  of  more 
than  ten  per  cent  is  offered  or  paid;  (3)  All  securities  into  the 
specified  par  value  of  which  the  element  of  chance  or  hazard  of 
speculative  profit  or  possible  loss  equal  or  predominate  over  the 
element  of  reasonable  certainty,  safety,  and  investment;  (4)  All 
securities  the  value  of  which  materially  depends  on  proposed  or 
promised  future  promotion  development  rather  than  on  present 
tangible  assets  and  conditions;  (5)  The  securities  of  any  enter¬ 
prise,  association,  partnership  or  corporation,  which  has  included 
or  proposes  to  include  in  its  assets  a  materal  part  thereof,  patents, 
formula,  good-will,  promotion  or  intangible  assets,  or  which  has 
issued  or  proposes  to  issue  a  material  part  of  its  securities  in  pay¬ 
ment  for  formula,  patents,  good-will,  promotion  or  intangible 
assets;  (6)  Securities  made  or  issued  in  furtherance  of  promotion 
any  enterprise  or  scheme  for  the  sale  of  unimproved  or  undeveloped 
land  on  any  deferred  payments  or  installment  plan,  when  such 
lands  are  not  situated  in  the  State  of  Oklahoma  and  the  value  of 
such  securities  materially  depends  on  the  future  performance  of 


Blue  Sky  Law 


111 


any  stipulation  by  the  promoters  of  such  enterprise  to  furnish  ir¬ 
rigation  or  transportation  facilities,  or  other  value  enhancing  util¬ 
ity  or  improvement.  The  term  “speculative  enterprise”  as  used  in 
this  Act  shall  be  taken  to  mean  any  business  undertaking,  project, 
venture  or  activity  for  the  promotion  or  furtherance  of  which 
“speculative  securities,”  as  herein  defined,  are  made,  issued,  sold,  or 
offered  for  sale.  For  the  purpose  of  carrying  out  the  provisions 
of  this  Act,  there  is  hereby  created  a  Commission,  to  be  known  as 
the  State  Issues  Commission,  composed  of  the  Bank  Commissioner, 
who  shall  be  chairman  thereof,  the  Secretary  of  State  and  State 
Auditor.  The  said  Commission  shall  have  authority  to  appoint,  with 
the  approval  of  the  Governor,  a  secretary,  who  shall  receive  a 
salary  of  $2,5000.00  per  annum,  payable  monthly. 

Sec.  2270  C.  O.  S.  1921,  L.  1919,  p.  77. 

235.  Sale  of  Securities.  It  shall  be  unlawful  for  any  person, 
co-partnership,  association,  or  corporation,  hereinafter  called  the 
promoter,  either  as  principal,  or  through  brokers  or  agents,  to  sell  or 
offer  for  sale  or  by  means  of  any  advertisements,  circulars,  or  pros¬ 
pectus,  or  by  any  other  form  of  public  or  private  offerings,  to  at¬ 
tempt  to  promote  the  sale  of  any  speculative  securities  in  this  State, 
including  capital  stock  of  such  promoter,  unless  there  first  shall 
have  been  filed  with  and  approved  by  the  said  Commission,  (1) 
a  copy  of  the  securities  so  to  be  promoted;  (2)  a  statement  in  sub¬ 
stantial  detail  of  the  assets  and  liabilities  of  the  person  or  company 
making  and  issuing  such  securities  and  of  any  person  or  company 
guaranteeing  the  same,  including  specifically  the  total  amount  of 
such  securities  and  of  any  securities  prior  thereto  in  interest  or 
lien,  authorized  or  issued  by  any  such  person  or  company ;  (3)  if 
such  securities  are  secured  by  mortgage  or  other  lien,  a  copy  of  such 
mortgage  or  of  the  instrument  creating  such  lien,  and  a  competent 
appraisal  of  valuation  of  the  property  covered  thereby,  with  a  spe¬ 
cific  statement  of  all  prior  liens  thereon  if  any ;  (4)  a  full  state¬ 
ment  of  facts  showing  the  gross  or  net  earnings,  actual  or  esti¬ 
mated,  of  any  person  or  company  making  and  issuing  or  guarantee¬ 
ing  such  securities,  or  of  any  property  covered  by  mortgage  or 
lien;  (5)  all  knowledge  or  information  in  the  possession  of  such 
promoter  relative  to  the  character  or  value  of  such  securities,  or  of 
the  property  or  earning  power  of  the  person  or  company  making 
and  issuing  or  guaranteeing  the  same;  (6)  a  copy  of  any  general 
or  public  prospectus  or  advertising  matter  which  is  to  be  used  in 
connection  with  such  promotion,  and  no  such  prospectus  or  adver¬ 
tising  matter  shall  be  used  unless  the  same  has  been  filed  hereunder ; 
(7)  the  names,  addresses  and  selling  territory  in  this  State  of  any 
agents  by  or  through  whom  any  such  securities  are  to  be  sold,  and 
no  such  agents  shall  be  employed  unless  such  statement  with  re¬ 
spect  to  them  has  been  filed  hereunder,  and  there  shall  have  been 
paid  to  the  said  Commission  a  registration  fee  of  Five  Dollars 


Mothersead,  Bank  Comm.,  v. 


1 1 2 
J  j  «j 


($5.00)  for  each  such  agent.  The  payment  of  such  fee  shall  be 
payment  in  full  of  all  fees  for  registration  of  such  agent  until  and 
including  the  first  day  of  March  next  following;  (8)  the  names  and 
address  of  such  promoter,  including  the  names  and  addresses  of  all 
partners,  if  the  promoter  be  a  partnership,  and  the  names 
and  addresses  of  the  directors  or  trustees,  and  of  any  person  owning 
ten  per  centum,  or  more,  of  the  capital  stock,  if  the  promoter  be  a 
corporation  or  association;  (9)  a  statement  showing  in  detail  the 
plan  on  which  the  business  or  enterprise  is  to  be  conducted;  (10) 
the  articles  of  co-partnership  or  association  or  corporation  and  all 
other  papers  pertaining  to  its  organization,  if  the  securities  be  in¬ 
sured  or  guaranteed  by  a  co-partnership  or  unincorporated  asso¬ 
ciation;  (11)  a  copy  of  its  charter  and  by-laws  if  the  securities  be 
issued  or  guaranteed  by  a  corporation;  (12)  a  filing  fee  of  Twen¬ 
ty-five  Dollars  ($25.00). 

2271  C.  O.  S.  1921,  L.  1919  p.  77. 

236.  Permit.  If  the  said  Commission  shall  decide  that  the 
sale  of  stocks  or  bonds  will  be  fairly  and  honestly  conducted,  both 
to  the  corporation  and  to  the  public,  such  permit  shall  be  granted, 
provided  that  the  commissions,  promotion  and  other  incidental  ex¬ 
penses,  exclusive  of  the  exempted  expenses  mentioned  in  Section 
1  of  this  Act,  shall  not  be  more  than  fifteen  per  cent  (15%)  of  the 
price  at  which  such  stock  or  bonds  is  to  be  sold  as  shown  by  the 
application  or  amended  application.  Provided,  that  where  any 
proposed  corporation  has  already  sold  its  stock  or  bonds  or  a  part 
thereof,  or  any  part  thereof  has  been  subscribed  at  the  time  this 
Act  shall  take  effect,  this  Act  shall  not  affect  stocks  or  bonds  pre¬ 
viously  sold  or  subscribed  nor  any  contracts  made  in  reference  to 
same ;  but  if  any  of  the  stock  or  bonds  of  said;  proposed  corporation 
remains  unsold  or  unsubscribed,  said  corporation  shall,  neverthe¬ 
less,  be  entitled  to  a  permit  upon  complying  with  the  other  conditions 
of  this  Act,  including  the  future  sale  or  subscription  of  any  of  its 
stock  or  bonds.  The  commission  or  promotion  fee  shall  be  paid  to 
the  agent  or  promoter  as  the  stock  or  bonds  are  sold  by  him  and 
paid  for  by  the  purchaser.  The  stock  or  bonds  shall  be  considered 
as  paid  for  when  paid  for  in  cash  or  property  or  labor  of  par 
value  thereof.  No  permit  shall  be  granted  unless  there  shall  ap¬ 
pear  upon  the  subscription  lists  and  contracts  of  such  corporation 
or  proposed  corporation,  in  bold  type,  the  amount  of  the  commis¬ 
sions,  promotion  fees  and  other  estimated  expenses  incident  to  the 
sale  of  such  stock  or  bonds  and  the  interest  which  the  officer,  agent, 
employee  or  promoter  selling  or  contracting  to  sell  such  stock  or 
bonds  has  in  such  sale ;  nor  shall  such  permit  be  granted  until  the 
applicants  thereof  have  entered  into  a  bond  for  not  less  than  One 
Thousand  Dollars  ($1,000.00)  nor  more  than  One  Hundred  Thou¬ 
sand  Dollars  ($100,000.00),  the  same  to  be  fixed  by  the  said  Com¬ 
mission  at  not  less  than  ten  per  cent  (10%)  of  the  stock  or  bonds 


Blue  Sky  Law 


113 


proposed  to  be  issued.  The  said  bond  shall  be  payable  to  the  said 
Commission,  conditioned  that  the  facts  set  forth  in  the  application 
foi  such  permit,  and  the  proof  and  statements  offered  to  the  said 
Commission,  upon  which  the  application  is  based,  are  true,  and  that 
they  comply  with  the  provisons  of  this  Act  in  the  sale  of  the  stock  or 
bonds  of  such  corporation  or  proposed  corporation.  Said  bond  may 
be  made  with  individual  sureties  or  a  surety  company  authorized 
to  do  business  in  the  State  of  Oklahoma  and  the  bond  shall  be  ap¬ 
proved  by  the  said  Commission. 

2272  C.  O.  S.  1921,  L.  1919,  p.  77. 

237.  Civil  Remedies.  Any  person  who  shall  be  induced  to  pur¬ 
chase  any  stock  or  bonds  of  any  corporation  or  proposed  corpor¬ 
ation  by  the  officers,  agents,  employees,  promoters  or  trustees,  by 
reason  of  any  misrepresentation  of  any  material  fact  concerning  such 
stock  or  bonds,  such  person  or  persons  shall  have  the  right  to  bring 
suit  upon  the  bond  above  provided  for,  and  such  bond  shall  be 
subject  to,  and  secuurity  for  such  person  so  purchasing  the  stock 
or  bonds  provided  that  such  person  shall  not  be  entitled  to  recover 
more  than  the  money  paid,  or  the  actual  value  of  the  property 
given, .  or  the  labor  performed,  in  exchange  of  such  securities  with 
legal  interest  from  the  date  of  the  payment  or  the  performance  of 
the  legal  services,  or  the  transfer  of  the  property.  One  or  more 
recoveries  upon  such  bond  shall  not  vitiate  the  same,  but  it  shall 
remain  in  full  force  and  effect,  but  no  recoveries  upon  such  bond 
shall  ever  exceed  the  full  amount  of  same,  and  upon  suits  being 
filed  in  excess  of  the  amount  of  same,  the  said  Commission  may  re¬ 
quire  a  new  bond,  and  if  the  same  is  not  given  within  thirty  days 
they  may  cancel  the  permit  herein  provided  for.  Whenever  any 
permit  has  been  issued,  the  corporation  or  persons  receiving  the 
same  shall  file  a  list  of  the  names  of  their  or  its  authorized  of¬ 
ficers,  agents  and  employees,  and  the  post  office  addresses  of  each; 
and,  in  case  of  change  of  any  of  its  officers,  agents  or  employees, 
it  shall  file  a  list  of  such  changes  with  the  said  Commission. 

2273  C.  O.  S.  1921,  L.  1919,  p.  77. 

238.  Foreign  Corporations.  Every  foreign  corporation  before 
selling  or  offering  for  sale  and  speculative  securities,  in  this  State, 
shall  also  file  its  written  consent,  irrevocable,  that  actions  may  be 
commenced  against  it  in  the  proper  courts  of  any  county  in  this 
State  in  which  cause  of  action  may  arise  or  the  plaintiff  may  re¬ 
side,  by  the  service  of  process  on  the  Secretary  of  State,  and  stipu¬ 
lating  and  agreeing  that  such  service  of  process  on  the  Secretary 
of  State  shall  be  taken  and  held  in  all  courts,  to  be  as  valid  and 
binding  as  if  due  service  had  been  made  upon  the  company  iteself, 
ment  shall  be  authenticated  by  the  seal  of  said  foreign  corporation, 
and  shall  be  accompanied  by  a  duly  certified  copy  of  the  order  or 


114 


Mothersead,  Bank  Comm.,  v. 


resolution  of  the  board  of  directors,  trustees,  or  managers  of  the 
corporation  authorizing  the  said  secretary  and  president  to  execute 
the  same. 

2274,  C.  O.  S.  1921,  L.  1919,  p.  77. 

239.  Examinations.  It  shall  be  the  duty  of  the  said  Com¬ 
mission,  as  soon  as  is  practical,  to  examine  the,  statement  and  docu¬ 
ments  so  filed  and  if  said  Commissio  nshall  deem  it  advisable, 
they  shall  make,  or  have  made,  a  detailed  inspection,  examination, 
audit  and  investigation  of  the  affairs  of  the  makers  or  guarantors 
of  such  securities  which  said  inspection,  examination,  audit  and  in¬ 
vestigation  shall  be  at  the  promoter’s  expense.  As  a  part  of  the 
aforesaid  inspection,  examination,  audit  and  investigation,  the  said 
Commission  may  cause  an  appraisal  to  be  made  of  the  property  of 
the  maker  or  guarantor,  including  the  value  of  patents,  formula, 
good-will,  promotion,  and  intangible  assets,  and  shall  furnish  a 
full  and  complete  statement  or  report  of  his  inspection  and  invest¬ 
igation  aforesaid  to  the  said  Commission.  The  said  Cmmission 
shall,  within  ten  days  thereafter,  give  the  promoter  a  hearing  if  he  so 
desires.  If  the  said  Commission  finds  no  legal  objection  to  the  en¬ 
terprise,  or  securities,  it  shall  note  in  a  book  to  be  kept  by  the  said 
Commission  for  that  purpose  that  said  person,  co-partnership,  asso¬ 
ciation  or  corporation  has  cmplied  with  Sectin  2  of  this  Act.  But, 
if  from  the  statements,  papers  and  documents  on  file,  and  the  in¬ 
vestigations  and  report  of  the  said  Commission,  or  from  other  evi¬ 
dence  submitted,  it  shall  appear,  the  said  Commission  shall  find 
(1)  that  the  makers  or  guarantors  of  said  securities  are  insolvent, 
in  failing  circumstances,  or  are  untrustworthy;  (2)  or  that  the 
promoters’  plan  of  business  is  unfair,  inequitable,  dishonest  or 
fraudulent;  (3)  or  that  the  promoters’  plan  of  business  does  not 
adequately  secure  the  investors  against  the  unlawful  dissipation 
or  mis-application  of  the  funds  of  the  enterprise  or  business ;  (4) 
or  that  the  promoters’  literature  or  advertising  is  misleading  and 
calculated  to  deceive  purchasers  or  investors;  (5)  or  that  the  se¬ 
curities  offered,  or  to  be  offered,  or  issued,  in  payment  for  property, 
patents,  formula,  good-will  or  promotion  and  intangible  assets  are 
in  excess  of  the  reasonable  value  thereof;  (6)  or  that  the  enter¬ 
prise  or  business  of  the  promoter  is  unlawful  or  against  public  pol¬ 
icy;  (I)  or  is  a  mere  scheme  of  a  promoter  or  promoters  to  get 
rich  quick  at  the  expense  of  the  purchasers  of  the  aforesaid  secur¬ 
ities;  the  said  Commission  shall  reduce  its  said  findings  to  writings 
and  attest  the  same  by  the  signature  of  the  chairman  and  secretary 
thereof.  Notice  of  such  finding,  or  findings,  shall  immediately  be 
given  to  the  applicant  by  registered  mail.  And  it  shall  thereafter 
be  unlawful  for  the  promoter  or  any  broker  or  agent  of  said  pro¬ 
moter  to  sell,  offer  for  sale,  or  by  means  of  any  advertisement,  circu¬ 
lar  or  prospectus,  or  by  any  other  form  of  public  offering  to  attempt 
to  promote  the  sale  of  any  such  speculative  security,  or  secur¬ 
ities,  in  this  State. 


Blub  Sky  Law 


115 


2275  C.  O.  S.  1921,  L.  1919,  p.  77. 

240.  Investigation.  The  said  Commission  shall  at  any  time 
have  the  authority  and  jurisdiction  to  investigate  the  affairs  of  any 
speculative  enterprise,  the  securities  of  which  are  being  sold  or  off- 
eied  foi  sale  in  this  State,  and  after  giving  the  promoters  a  hear¬ 
ing,  may  if  the  evidence  warrants,  make  any  of  the  adverse  findings 
enumerated  in  Section  2775  of  this  Act,  and  it  shall  thereafter  be 
unlawful  for  any  person,  co-partnership,  association  or  corpora¬ 
tion  to  sell,  offer  for  sale,  or  by  means  of  any  advertisement,  circu- 
ar,  or  prospectus  or  by  any  form  of  public  offering  to  attempt  to 

promote  the  sale  of  the  securities  of  such  speculative  enterprise  in 
this  State. 

2276,  C.  O.  S.  1921,  L.  1919,  p.  77. 

241.  Actions  to  Vacate  Findings.  Any  person,  co-partnership, 
association  or  corporation  being  dissatisfied  with  any  finding,  or 
findings,  of  the  said  Commission  made  in  accordance  with  the  pro¬ 
visions  of  this  Act,  may,  within  thirty  days  from  the  making  there¬ 
of,  commence  an  action  in  any  court  of  competent  jurisdiction 
against  said  Commission  as  defendant,  to  vacate  and  set  aside  said 
finding,  or  findings,  on  the  ground  that  the  said  findings,  are  unjust 
or  unreasonable.  The  rules  of  pleading  and  procedure  in  such  action 
shall  be  the  same  as,  are  approved  by  law  for)  the  trial  of  equitable 
actions  in  the  district  courts  of  this  State  and  on  the  hearing,  the 
judge  of  said  court  may  set  aside,  modify  or  confirm  said  findings 
as  the  evidence  and  the  rules  of  equity  may  require.  Appeals  may 
be  taken  from  the  decision  of  the  district  court  to  the  Supreme 
Court  by  either  party  in  the  same  manner  as  is  provided  by  law  in 
other  civil  actions.  Pending  any  such  action,  the  said  findings  of 
said  Commission  shall  be  prima  facie  evidence  that  they  are  just 
and  reasonable  and  that  the  facts  found  are  true,  and  pending  any 
such  action  the  said  findings  of  the  said  Commission  shall  remain 
in  full  force  and  effect.  If  no  action  be  brought  to  set  aside  said 
findings  within  thirty  days,  the  same  shall  become  final  and  binding. 

2277  C.  O.  S.  1921,  L.  1919.  p.  77. 

242.  Amendments.  No  amendment  of  the  charter,  articles  of 
incorporation,  constitution  or  by-laws  of  any  such  corporation  or 
the  articles  of  association  or  by-laws  of  any  unincorporated  associa¬ 
tion  subject  to  this  Act,  shall  become  operative  until  a  copy  of  the 
same  has  been  filed  with  the  said  Commission,  as  provided  in  regard 
to  the  original  filings  of  charters,  articles  of  incorporation,  or  asso¬ 
ciation,  constitution  and  by-laws,  and  it  shall  be  unlawfufl  for  any 
such  person,  co-partnership,  association  or  corporation  to  transact 
business  on  any  other  plan  than  that  set  forth  in  the  statement 
required  to  be  filed  by  Section  2  of  this;  Act,  or  td  make,  issue,  sell 
or  offer  for  sale  any  “security”  or  “securities”  required  to  be 
filed  by  Section  2  of  this  Act,  until  a  written  statement  showing  in 


116 


Mothersead,  Bank  Comm.,  v. 


full  detail  the  proposed  new  plan  of  transacting  business  and  a  copy 
of  the  proposed  new  “ security”  or  “ securities ’ ’  shall  have  been  filed 
with  the  said  Commission,  in  like  manner  as  provided  in  regard  to 
the  original  plan  of  business  and  proposed  ‘ ‘security’ ’  or  “secur¬ 
ities.” 

2278  C.  O.  S.  1921,  L.  1919,  p.  77. 

243.  Securities  Not  Included.  The  provisions  of  this  Act  shall 
not  apply  to,  (a)  securities  of  the  United  States,  or  any  foreign 
government;  or  of  any  state  or  territory;  or  of  any  county,  city, 
township,  school  district  or  other  public  taxing  sub-division  of  any 
state  or  territory  of  the  United  States  or  any  foreign  government; 
(b)  securities  of  public  or  quasi-public  corporations,  the  issues  of 
which  are  now  regulated  by  the  public  service  commission  or  board 
of  similar  authority  of  any  state  or  territory  of  the  United  States, 
or  securities  senior  thereto;  (c)  securities  of  state  or  national  banks 
or  trust  companies,  mortgage  companies  dealing  exclusively  in  bona 
fide  mortgages  on  farm  and  city  real  estate,  or  building  and  loan 
associations  authorized  by  the  State  Banking  Board  to  do  business 
in  this  state;  (d)  securities  of  any  domestic  corporation  organized 
without  capital  stock,  for  religious,  charitable  or  reformatory  pur¬ 
pose.  The  provisions  of  this  bill  shall  not  apply  to  the  sale  of  stock 
or  bonds  where  the  same  are  sold  for  cash  and  no  commission  or  fee 
is  paid,  directly  or  indirectly,  for  the  sale  of  same,  and  no  expense 
for  such  sale  is  charged  either  to  the  company  of  issue  or  the  pur¬ 
chaser  of  such  securities. 

2279  C.  O.  S.  1921,  L.  1919,  p.  77. 

244.  Accounts  to  be  Kept.  The  general  accounts  of  every  per¬ 
son,  co-partnership,  association  or  corporation,  issuing  or  guaran¬ 
teeing  any  securities  subject  to  the  provisions  of  this  Act,  shall  be 
kept  in  a  business  like  and  intelligent  manner  and  in  sufficient  de¬ 
tail  so  that  the  said  Commission  or  their  authorized  representative 
can  ascertain  at  any  time  the  financial  condition  of  such  person,  co¬ 
partnership,  association  or  corporation,  and  the  books  of  account 
and  affairs  of  any  such  person,  co-partnership,  association  or  cor¬ 
poration,  shall  be  subject  to  examination  by  the  said  Commission 
or  by  their  assistants,  accountants  or  examiners,  at  any  time  said 
Commission  shall  deem  it  advisable,  and  in  the  same  manner  as  is 
now  provided  for  by  the  examination  of  state  banks ;  and  such  per¬ 
son,  co-partnership,  association  or  corporation  shall  pay  the  actual 
traveling  and  hotel  expenses  of  the  assistant,  accountant  or  exam¬ 
iner  of  the  said  Commission  when  he  is  absent  from  the  Capital 
of  the  State  for  the  purpose  of  making  such  examination.  And  it  is 
provided  further,  that  every  person,  co-partnership,  association,  or 
corporation  making  or  guaranteeing  any  securities  subject  to  the 
provisions  of  this  Act,  shall  file  at  the  close  of  business  December 
31st,  of  each  year,  and  at  such  other  times  as  may  be  required  by  the 


Blue  Sky  Law 


117 


said.  Commission,  a  statement  certified  by  the  oath  of  some  person 
having  actual  knowledge  of  the  facts  therein  stated,  setting  forth, 
m  such  form  as  may  be  prescribed  by  said  Commission,  the  financial 
condition,  amount  of  property  and  liabilities  of  such  person,  co¬ 
partnership,  association  or  corporation,  and  such  other  information 
as  the  said  Commission  may  require.  Each  statement  shall  be  ac¬ 
companied  by  a  filing  fee  o  fTwo- Dollars  and  Fifty  Cents,  ($2.50). 
All  fees  herein  provided  for  shall  be  collected  by  the  said  Commis¬ 
sion  and  shall  be  turned  into  the  State  Treasury.  It  shall  be  un¬ 
lawful  for  any  person,  partnership  association,  or  corporation  sub¬ 
ject  to  the  provisions  of  this  Act,  failing  or  refusing  to  comply 
with  the  provisions  of  this  Section  within  ten  days  after  compliance 
is  required,  to  thereafter  sell  or  offer  for  sale  in  this  State  any 
speculative  stock  which  said  person,  partnership,  association  or  cor¬ 
poration  is  sellng  or  offerng  for  sale  in  this  State. 

2280  C.  O.  S.  1921,  L.  1919,  p.  77. 

245.  Special  Investigations.  The  said  Commission  shall  have 
powrer  upon  reasonable  notice  either  upon  their  own  initiative  or 
upon  complaint  of  any  responsible  person,  to  make  or  have  made 
such  special  inspection  or  investigation  as  they  may  deem  necessary 
in  connection  with  the  promotion,  sale,  disposal,  or  offering  for  sale 
or  disposal  in  this  State,  or  any  certificates,  shares,  stocks,  bonds, 
securities,  contracts,  or  contracts  or  bonds  for  deeds,  to  determine 
whether  the  same  constitute  a  violation  of  this  Act,  or  any  other 
statute  of  this  State,  by  any  individual,  co-partnership,  corporation, 
or  associaation,  promoting,  offering,  selling  or  pledging  the  same ; 
and  the  said .  Commission,  their  assistants  or  deputies,  shall  have 
the  power  to  issue  subpoenas  and  process  compelling  the  attendance 
of  any  person  and  the  production  of  any  papers  or  books  for  the 
purposes  of  such  investigation  and  examination,  and  shall  have 
power  to  administer  an  oath  to  any  person  whose  testimony  may  be 
required  on  examination  or  investigation ;  and  any  person  who 
shall  refuse  to  obey  any  such  subpoena  or  make  answer  to  any 
competent  and  material  question  propounded  to  him  by  the  said 
Commission  shall,  upon  conviction  in  any  court  of  competent  juris¬ 
diction,  be  deemed  guilty  of  a  midsemeanor,  and  fined  in  any  sum 
not  exceeding  Five  Hundred  Dollars  ($500.00)  or  be  punished  by 
confinement  in  the  County  Jail  for  not  more  than  ninety  days,  or 
both  such  fine  and  imprisonment.  Upon  the  conclusion  of  such 
investigation,  the  said  Commission  may  make  findings  of  any  fact 
touching  the  matter  or  matters  under  investigation,  and  such  find¬ 
ings  shall  be  prima  facie  evidence  of  the  truth  of  the  matters  there¬ 
in  found  by  the  said  Commission  in  any  action,  either  evil  or  crimi¬ 
nal,  instituted  under  any  of  the  laws  or  statutes  of  this  State  against 
the  person,  persons,  partnership,  corporation  or  association.  The 
notice  herein  provided  for  may  be  given  by  registered  letter  mailed 


118 


Mothersead,  Bank  Commv  v. 


to  the  last  known  address  of  person  or  persons  or  corporations  to  be 
investigated  and  the  said  Commissioner’s  certificate  shall  be  suf¬ 
ficient  evidence  of  such  notice  and  the  mailing  thereof. 

2281  C.  O.  S.  1921,  L.  1919,  p.  77. 

246.  False  Statements.  Any  person  who  shall  knowingly  make 
or  file  or  cause  to  be  made  or  filed  with  the  said  Commission  any 
statement,  document,  circular,  advertisement  or  prospectus,  required 
to  be  filed  by  this  Act,  which  is  false  in  any  material  respect  or  mat¬ 
ter,  shall  be  deemed  guilty  of  a  felony,  and  on  conviction  in  any 
court  of  competent  jurisdiction  punished  by  a  fine  of  not  less  than 
One  Hundred  Dollars  ($100.00)  or  more  than  Five  Thousand  Dol¬ 
lars  ($5,000,000)  or  by  imprisonment  in  the  State  penitentiary  for 
not  less  than  one  nor  more  than  five  years,  or  by  both  such  fine  and 
imprisonment. 

2282,  C.  O.  S.  19921,  L.  1919,  p.  77. 

246a.  Penalty — Felony. 

Any  person,  partnership,  association  or  corporation  who  shall 
commit  in  this  State  any  act  declared  unlawful  by  Section  two,  nine 
or  eleven  of  this  Act,  shall  be  deemed  guilty  of  a  felony  and  on  con¬ 
viction  in  any  court  of  competent  jurisdiction  be  punished  by  a  fine 
of  not  less  than  One  Hundred  Dollars  ($100.00)  nor  more  than  Five 
Thousand  Dollars  ($5,000.00),  or  by  confinement  in  the  Oklahoma 
State  penitentiary  for  a  term  of  not  less  than  one  nor  more  than 
seven  years. 

2283,  C.  O.  S.  1921,  L.  1919,  p.  77. 

247.  Private  Securities  Not  Included.  This  Act  shall  not  ap¬ 
ply  to  the  owner  of  any  speculative  security  who  is  not  the  maker 
or  issuer  thereof,  who  shall  acquire  and  sell  the  same  for  his  own 
account  in  the  usual  and  ordinary  course  of  business  and  not  for  the 
direct  or  indirect  promotion  of  any  enterprise  or  scheme  within 
the  purview  of  this  Act,  providing  that  such  ownership  in  good  faith. 
Repeated  or  successive  sales  of  any  such  speculative  security  or 
securities  shall  be  prima  facie  evidence  that  the  claim  of  ownership 
is  not  bona  fide,  but  is  a  mere  shift  or  device  to  evade  the  provisions 
of  this  Act. 

2284,  C.  O.  S.  1921,  L.  1919,  p.  77. 

248.  False  Entry.  Any  person  who  shall  knowingly  or  will¬ 
ingly  subscribe  to,  or  make,  or  cause  to  be  made  any  false  statements 
or  false  entry  in  any  book  of  account  or  any  person,  co-partner¬ 
ship,  association  or  corporation,  subject  to  the  provisions  of  this  Act, 
or  exhibit  any  false  paper  with  the  intention  of  deceiving  any  per¬ 
son  authorized  to  examine  into  the  affairs  of  such  person,  co-part¬ 
nership,  association,  or  corporation,  or  shall  make  or  publish  any 


Blue  Sky  Law 


119 


™lS^ittateme“V°f  the  financial  condition  of  any  person,  co-part- 

aA tion  or  corporation  subject  to  the  provisions  of  this 

Act  01  shall  knowingly  make  any  false  statements  materially  af- 

ctmg  the  value  of  the  stocks,  bonds  or  other  securities  offered 

„  If  !yKan1y  SUCj  per,son>  co-partnership,  association  or  corpor- 

TAVri  ,gU  tI  of  X  felony  and  upon  conviction  there- 
shall  be  fined  not  less  than  One  Hundred  Dollars  ($100.00)  nor 

more  than  Five  Thousand  Dollars  ($5,000.00),  or  shall  be  imprisoned 
tentiary  ^  ^  ^  n0r  more  than  ten  years  in  the  State  peni- 

2285,  C.  O.  S.  1921,  L.  1919,  p.  77. 


■ 


Index 


121 


INDEX 


Administrator — trust  company  may  act 

Affairs  wound  up — insolvent  bank _ 

Articles  of  incorporation . 

Assets — bank  may  pledge — when . 

disposal  of — insolvency . . . _ . 

Assignment  of  stock  _ 

Must  be  reported  _ _ _ _ _ 

Assistant  Bank  Commissioner  . . 

Bond  and  oath  . 

Salary  . 

Secretary  Building  and  Loan  Board _ 

Assistant  to  Commissioner  . . . 

Bonds  and  oath  . 

Salaries  . . . 

Attorney — special  _ _ _ 

Salary  . . 

Powers  and  duty  . . . 

Additional  _ _ 

Salary  _ 

Pees  in  usury  case  . . . 

Auditors — building  and  loans _ 


63 

45 

9 

21 

68 

38 
25 

39 
39 
39 
97 

39 

40 

40 

41 

41 

42 

43 
43 
81 


Authority — bank  to  organize  _ 

Buy  bonds,  etc . . 

May  be  revoked  _ 


. . - . 97-102 

. . - .  10 

— . 10-62 

Banks — by-laws  . .  . .  . 

Word  used  wrong  . ^ 

May  invest  in  bonds  . 10-31 

Misuse  of  word,  crime . 55 

Must  report  interest  _ 

Student  loans  _ 

To  be  examined  _ 


81 

32 

43 

39 


Bank  Commissioner — appointment  . . 

Member  Issues  Commission  _ _  _ 

Bankers  lien  . 

Bills  payable — limit  . . 

Margin  of  security  .  . .  21 

False  issue  of — Penalty  .. . . . . 

Blanks — Bank  Commissioner  to  furnish  . . . . 17 

Blue  sky  law  _ _ _ _ 

Commission  Created  . _ 

Speculative  securities  _ _ 

Sale  of  . . . . . 

Of  foreign  corporation  .  113 

Permits  _ _ _  _ . 

Securities  not  included  . __ 

Examination  of  applicant  . 

By-laws,  charter,  etc.,  to  be  filed  . . . 

Investigation  of  applicant  .  _  .  ^ 

Special  _ _  ” .  0 

Private  _ 


33 

21 


58 

25 

110 

111 

110 

111 


112 

116 

115 

115 


117 

118 


Courts  may  review,  when  _ .. _ 


Accounts  must  be  kept 

False  statement  _ 

Penalty  _ 

False  entry  _ 

Board — Banking — members 
Banks  may  select  _ 


116 

118 

118 

118 

35 

36 


122 


Index  Continued 


Removal  . - . 

Bond  Clerk — office — salary  . 

Bonds — employees  of  banks  . 

Approval  by  directors  . 

Bank  may  purchase  U.  S . 

May  invest  in  . . 

Borrowing  money  by  officer — Crime 

Building  and  Loans  . 

Auditors  . 

Board  . •• - 

May  be  removed  . 

By-laws  . 

Rule  . 

Rule  . 

Cancellation  fee  . 

Capital  stock  . 

Rule  . 

Increased  . 

How'  increased  . 

Certificate  from  Commissioner 

Term  . 

Charter  . 

Notice  of  application  for  - 

May  extend  life  . 

Directors — terms  . 

Exempt  from  taxation  . . 

Examination  . 

Pay  for  . 

Rule  of  4c  fee  . 

False  swearing  . 

Fees  to  State  Treasurer  . 

Incorporation  . 

Notice  of  . . 

Relates  back  . . — 

Insolvency  . 

Interest  rate  . 

Liquidation  . 

Loan  or  Investment  fund  . 

Loans  without  bids  . . 

Management  . 

May  Extend  Charter  . 

Matured  Shares  . •• . 

May  Borrow  Money  . . 

Rules  . . 

May  Purchase  at  Foreclosure  - 

May  Sell  Notes  and  Mtg . •• - 

Married  Women — Stock  . 

Minors  Stock  . 

Neglect  not  Forfeiture  . 

No  Voluntary  Assignment  . 

Oath  of  Officer  . 

Payment  of  Loans  . 

Penalty  violating  laws  of  . 

Regulation  of  . •• . 

Foreign  to  deposit  . 

Rule  . 

Rules  of  Board  . . 

Seal — to  purchase  . 

Series  of  Stock  . 

Semi-annual  report  . 


....  36 

....  42 

....  14 

....  13 

..10-64 
..31-64 
....  53 

....  87 

97-102 
....  96 

....  102 
.....  89 

.....  89 

.  90 

.  101 

.  88 

.  88 

.  88 

.....  89 

...  104 

.  104 

.  87 

.  91 

.  94 

......  94 

.  96 

.98-104 

. .  99 

......  99 

.  105 

.  105 

.  91 

.  91 

.  95 

.  100 

.  94 

.  101 

.  95 

.  103 

.  92 

.  94 

.  95 

.  100 

.  100 

.  91 

_ _  100 

......  95 

.  95 

.  91 

.  104 

.  93 

. .  90 

.  105 

.  99 

.  99 

.  100 

.  98 

.  93 

.  94 

.  94 


Index  Continued 


123 


Stock  Certificates  . 

Stock — how  issued 

Rule  _ _ 

Minors  and  Married  Women 
Supervision  by  Board 
By  Commissioner 
Validating-  Mortg-ag-es  . 

Vacancy  . 

Voluntary  liquidation  . 

Withdrawal  fees  . 

Foreign  . . 

Agents  to  be  appointed  _ 

Certificate  of  authority  _ 

Certificate  fee  . . . 

Charter-file  copy 
Commissioner  to  Examine 

Loans  by  . 

Must  comply  with  law 

Not  apply  to  domestic  _ 

“Resident”  defined  _ 

Shareholders  may  withdraw 

Transacting  business  . . . 

No  certificate  . 

Unlawful  soliciting  . 

Usurious  contract  prohibited 


.  93 

.  103 

.  103 

.  95 

—  98 

.  102 

.  91 

.  94 

.  104 

.  101 

....  106 
....  106 

—  106 
.....  107 
....  106 
....  107 
....  108 

109 

....  110 
.J.  109 
....  109 
....  109 
...  109 
...  109 
...  108 


Call  reports  by  Commissioner 

Capital  stock — banks  . 

Not  to  be  impaired  . 

Proceedings  when  impaired 

Building  and  loans  . . . 

Increased  . 

Trust  companies  _ _ 

Change — how  . . 

With  bank  _ _ _ 

Liable  for  deposits  _ 

Certificate — of  authority  . 

Cheats,  frauds  and  bogus  checks  . . 

Checks — certified  . 

False — crime  . 

Bogus  . . 

Penalty  . 

Charter — must  be  approved 

Building  and  loan  . . 

Change — capital  stock  . ’  ’ 

Claims — notice  to  creditors 

Clerks — chief — salary  . 

Bond — salary  _ _ 

Law — salary  _ _ 

Convicted  person — not  to  be  in  bank 
Commissioner — powers 

Appointment  _ _ 

Assistant  . . . 

Bond  and  oath  _ .. _ 

Examiners  . 

Salary  _ .. _ 

Corruption  of  . 

Council — Executive  . . 

County  Attorney — enforce  bank  laws 
Enforce  trust  laws  . 


. .  17 

.  11 

.  20 

. 22 

.  88 

.  88 

-  .  69 

. -  69 

.  75 

.  76 

. .  10 

-  .  86 

. .  42 

. 57-59 

........  86 

.  87 

.  37 

.  91 

.  11 

.  48 

. -  42 

.  42 

.  43 

.  38 

.......  38 

.  39 

.  39 

.  40 

_ _  39 

.  41 

.  60 

.  36 

.  61 

.  68 


.124 


Index  Continued 


Collateral — may  redeem  - - 

Compensation — liquidating  agents  - - 

Attorneys  — . . — 

Crimes — certified  check  . 

Concealment  of  records  — - - 

Corruption  of  Commissioner  - 

Certified  check — No  funds  - 

Corruption  in  office  - : - " - 

Depository  of  funds  - - - - 

Destruction  of  records  - 

Dispose  of  funds — insolvent  - 

Embezzlement  - - - 

False  advertising  - 

False  cert,  of  deposit  - 

False  draft  — - - 

False  check  - - - - 

False  reports  - - 

False  entry  - - - *' 

False  statement  . . . 

False  swearing  - - - - 

Fraud  - 

Give  preference  - - - - - 

Loans  without  approval  - - 

Loans  to  officers  . . . . 

Misapplication  of  funds  - 

Misuse  word  “bank”  - - 

Officers  borrowing  money  - - 

Penalty  for  violations  - 

Pledge  of  assets  - - - 

Receiving  deposits — insolvent  - 

Trust  company  false  report  - 

Building  and  loan  false  swearing  - •• - 

Debts — Commissioner  may  compound  - 

Notice  to  bank  - - - 


Deposits — general  - - - - 

Charter  revoked  but  receiving  . . 

By  guardian  — - - " - 

Rate  of  interest  . * - - - 

Receiving  when  insolvent  — •• - - - 

Trust  company  may  receive  - - - 

Of  personal  property  . . - 

Special  - •• . . 

May  guarantee  - - 

Fiduciary  property . . 

Capital  of  Trust  Co.— liable  for  . . 

Withdrawal  - •• . . . . 

Depositories — banks  and  Trust  co . . . 

State  funds  - - " . . 

Security  for  . . . 

Approval  - - - - - 

Sinking  fund  - - 

County  funds  . — - - - - 

Directors — board  of  - - 

Liabilities  - - - 

Must  fix  bonds  - 

Loans  without  approval  - - - 

Of  Trust  company  - 

Of  building  and  loans  - - - 

Dividends — reported  - 

Failure  to  report  - - 


...  50 

...  49 

...  49 

...  20 
...  60 
....  60 
...  58 
....  37 

...  29 

....  60 
....  58 

....  55 

....  55 

....  57 

....  57 

....  59 

..53-68 
....  58 

....  60 
57-105 
....  55 

....  21 
.....  60 
.....  53 

.....  57 

.....  55 

.....  53 

_  61 

_  21 

_  54 

_  68 

_  105 

...48-51 

_  51 

_  10 

_  23 

_  30 

_  19 

_  54 

_  63 

.  63 

.....  63 

...63-68 

.  68 

_ _  76 

.  76 

_ _  26 

....26-27 

_ _  27 

_ _  27 

_  28 

_ _  28 

_  12 

_  12 

_  13 

_  60 

_  65 

......  94 

_  18 

_ _  18 


Index  Continued 


125 


May  declare  . 

Must  build  surplus  . . . 

Only  from  profits  . 

Of  trust  company  _ 

Drafts — certified  . . 

False  . . . . . 

Examinations — banks  to  have 

Fees  for  . 

Executive  Council — kow  named 

Fees  . . . 

Executor — trust  company  may  be 

Trust  company  may  vote  stock  . 

Not  liable  as  stockholder  . 

False  advertising-  _ 

Entry  . .. . . 

Swearing  . 

Statement  . . 

Reports  . 

Checks  . 

Federal  Reserve  Bank  . . . 

May  Join  _ .. . . 

No  limit  to  loans . 

Fees — trust  company  not  interest  . . "  ” 

Examination  . . . . 

Fidelity  bonds — trust  company  may  write 

Employees  of  banks  . 

Fiduciary  deposit  of  trust  company 

Trust  Company  must  deposit  . . 

Amount  . 

Bank  Commissioner  to  examine  security 

Fiscal  Agent — trust  company  may  be  . . 

Foreclosure  building  and  loan  may  purchase  at 
Funds — reserve  required 

Misapplication  _ _ 

Fraudulent  use  of  funds  _ _ _ 

Furniture  and  fixtures — limit  . ~ 

Guarantee  titles — trust  company  may . 

Guaranty  Fund — title  to  . ™  ” 

Guardian — deposit  by 

Trust  company  may  act  . . 

No  limit  _ _ 

Vote  stock  as  . . 

Not  liable  on  stock . . . 

Impaired  Capital — trust  company . 

Incorporation — bank  . . 

Building  and  loan  ...... _ _ 

Trust  company  . . 

May  extend  building  and  loan 

Indebtedness — departments  to  report  . . 

Attorney  General  to  collect  . . 

Insolvent — banks  . 

May  repair  credit  . _ 

May  resume  business  _ .. _ 

Notice  to  creditors  _ _ 

Dividends  of  _ _ 

Inventory  _ _ _ 

Assets  collected . . 

Deposited  . . 

Redeem  collateral  . . .  . . 

Trust  company  . 


-  2C 

.  20 

.  20 

.  66 

-  20 

. 57-59 

.  43 

.  43 

.  36 

- -  36 

.  63 

-  69 

■ .  68 

. . 31-55 

. 57-58 

. 57-105 

.  60 

.  53 

.  59 

— .  33 

. .  34 

.  35 

. .  77 

.  43 

.  64 

.  14 

.  68 

.  71 

.  71 

.  71 

.  64 

.  91 

.  16 

.  57 

.  55 

.  10 

.  64 

.  52 

.  30 

. 63-65 

.  65 

.  69 

.  69 

.  73 

.  9 

.  91 

.  61 

.  94 

.  44 

.  44 

.  25 

-  46 

. .  47 

. .  48 

.  50 

.  49 

.  49 

.  49 

.  50 

.  74 


126 


Index  Continued 


Inspection — records  of  Trust  Co . . . 

Interest — rates — usury  . 

Liability  of  endorser  of  note  for  usury  . 

May  be  deducted  from  loan  . 

Or  judgments  . 

After  breach  of  contract  . 

Building  and  loan  rates  . 

Investments — by  trust  company  . 

Jurisdiction  denied  in  usury  case . 

Letters  of  Credit — trust  company  may  issue  . 

Liquidation — act  retroactive  . 

Voluntary  . 

To  wind  up  . •• . 

Suits  in  name  of  state . . 

Notice  to  creditors  . 

Inventory  . 

Assets  collected  — . . - . 

Dividends  . . - 

Title  in  state  . 

Agents  . . 

Attorneys  .. — . - . 

Salary  . . 

Compensation  . - . - . 

May  redeem  collateral  . - . 

Prior  mortgages  . . 

Limitation  of  foreclosure  . . 

Surety  company  may  participate  . . 

Loans  on  real  estate — bank  . 

No  new — when  . 

Total  to  any  one  person  . - . 

Payment  by  building  and  loan  . 

By  foreign  building  and  loan  - 

Losses  from  surplus  . •• . 

Misapplication  of  funds  . 

Money — taxation  of  . - . 

Scheduled  . 

Mortgages  to  building  and  loan  valid  . 

National  bank — become  state  bank  . 

Notes — taxation  of  . 

Officers — to  give  bond  — . . 

Bond  to  be  approved  . 

Removal  of  . . . . 

Violation  of  law  by  . 

Overdrafts  . . . 

Convicted  person  not  to  be  . 

Borrowing  money  from  bank  . - . 

Organization  of  banks  . •• . 

Certificate  . 

Trust  company  . 

Over  drafts  . —  •• . 

Permit — may  be  revoked  . 

Possession — of  banks  . 

Posting  notice  . . . 

Preferences — prohibited  . 

Records — to  be  preserved — banks  . - . 

Trust  company  .... .. . 

Inspection  . 

Real  Estate — loans  on  . 

May  own  . . 

Rediscount — no  limit  . 


.....  69 

....  78 

.....  80 
....  82 
.....  82 

.  82 

.....  94 

_  66 

.  80 

.  64 

.  52 

.  19 

.  45 

.....  47 

....47-48 

.  49 

. .  49 

_  50 

_  51 

.  46 

.  46 

.  47 

.  49 

.  50 

.  51 

.  51 

.  52 

.  10 

.  16 

.  17 

. ••  90 

_  108 

.  20 

.  57 

.  86 

.  86 

_  91 

.  23 

.  84 

.  14 

. 13-14 

.  14 

.  14 

.  21 

_  38 

. .  53 

.  9 

.  10 

.  61 

. .  21 

.  23 

.  18 

.  18 

.  21 

.  25 

.  66 

.  69 

. . 10-64 

10-11-23 
.  21 


Index  Continued 


127 


Reports — required  _ _ _ _ 

Published  _ _ 

Failure  to  make  _ 

Call  . . 

By  trust  company  _ 

Published  _ _ 

False  . . 

Reserve — required — Banks 

No  new  loans  _ 

Rules  . . 

Safety  vaults — trust  company 

Rents  not  paid  . . 

Saving-s  deposits — trust  company 

Capital  liable  for  . 

Accounts,  of  minors  . 

Invest  trust  funds  . 

Supervision  . 

Withdrawals  . . 

Securities — not  in  commerce 

For  state  funds  . 

For  county  funds  . 

Bonds  liable  for  . . 

Of  trust  company  examined  . 

May  be  examined  . 

Deposited  with  State  ..... 

Liable  for  debts  . 

Additional  deposit  . 

Shares  of  stock — no  loan  on  . . 

As  collateral  may  sell  . 

Personal  property 

May  be  transferred  . 

Sale  to  be  reported  . 

Assignment  . 

Taxation  of  _ _ 

Special  deposit — trust  company 
State  depository — when 

Stenographers — office  . 

Stockholders — additional  liable 

Total  indebtedness  . 

Notice  of  increase  . . 

Impair  capital  . 

List  kept  . 

Liability  on  failure  _ 

May  be  compounded  . 

Trust  company  . . . . 

Trust  company  may  vote  . 

Student  loans  . 

Surety  company  may  participate 

Surplus — build  up  . 

Losses  out  of  . 

Taxation — banks  . 

Trust  company  . . 

Notes,  bonds,  etc.  . . . . 

When  . 

How  distributed  . 

Penalty  _ _ _ 

Failure  to  pay . . 

Money  _ _ _ 

Money  and  credits — rate  . . 

Scheduled  . 


-  17 

. .  18 

. .  18 

-  44 

.  66 

.  67 

.  53 

.  16 

.  16 

. 25-26 

.  63 

.  70 

-  75 

.  76 

. —  76 

.  77 

- —  76 

......  76 

......  15 

.  27 

.  29 

.-27-30 

.  71 

.  71 

.  71 

.  72 

.  73 

...15-25 

. .  15 

. .  24 

.....  24 

.  25 

.  38 

...77-82 

.  63 

—.  26 
.....  42 

...15-62 

.  25 

11 

.....  22 
.....  22 
.....  48 

....  48 

....  68 
....  69 

....  32 

....  52 

....  20 
....  20 
....  82 
....  77 

....  84 

....  84 

...  85 

...  85 

...  85 

...  85 

...  86 
...  86 


128 


Index  Continued 


Building-  and  loan  exempt  . - . 

Trust  companies — articles  of  incorporation  . 

Attorney  in  fact  may  be . . 

Accounts  of  minors  - 

Bank  under  supervision  . - . 

Book  open  to  inspection  . 

Bonds  and  warrants— buy  .  m . 

Capital  stock  . . . 

Change  of  capital  . - . 

Notice  . 


How  . 

Commercial  bank — may  have 

Capital  for  . . . 

Deposit  securities  with  state 

Amount  . . 

Certificate  . . 

Liable  for  debts  . 

Additional  . 

Directors  . 

Dividends  of  . . 

Failure  to  report  - 

Fees  not  interest  — . 

Fiduciary  deposit  special  ... 

Fidelity  bonds  . 

Guardian — no  limit  — . 


Incorporation  - - - 

Investment  by  . — . 

Impairment  of  capital  — . . . . . 

Insolvency  and  liquidation  . . . . . 

Investment  of  trust  funds  . . . 

Loan  of  money,  etc.  ~ . — - - - - 

May  engage  in  banking  . . . . . - . 

May  act  as  executor  . . . 

No  limit  as  Guardian  . . . . . 

Records  of  - •• - - - 

Report  of  . . - - - 

Published  - •• . . . 

Shareholders  - - 

Executor  not  liable  - - - 

Guardian  not  liable  - - 

Executor  to  vote  for  - 

Liable  when  — •• . . . 

Safety  deposit  boxes  — . . . . 

Failure  to  pay  rent  . — . . . 

Supervision  and  control  . . . - . - . 

Taxation  of  stock  — . - . . . 

“Trust”  not  to  be  used  . 

U.  S.  Bonds — bank  may  buy  . . - . - . 

Trust  company  . 

Usury — banks  must  report  . — . . . 

Attorney  fees  when  . — . - . 

Forfeiture  of  charter  - - . 

How  liquidated  . 1 . . - . 

Jurisdiction  denied  . . . •• . 

Liability  as  endorser  of  note  . - . 


Interest  rate  . 

Penalty  — . — 

Building  and  loan  not 
Usury  prohibited 
Voluntary  liquidation  . 


TH 

SH 

ftRYi 

FT 

HE 

FEB  2  7  1933 

.  96 

. 62-65 

. . .  63 

_  76 

.  75 

. . 69 

. .  64 

.  65 

. .  69 

.  69 

. 69 

_  74 

.  75 

.  71 

.  71 

.  72 

.  72 

. 73 

. . 65 

. .  66 

.  68 

. . .  77 

. .  68 

. .  64 

.  65 

. . .  61 

.  66 

_ _  73 

_  74 

. 77 

. . 64 

. 11-74 

. . 63-65 

. 65 

_ _ _  66 

.  66 

. .  67 

_  68 

.  68 

. .  68 

_ _ 69 

.  62 

. .  70 

.  70 

. 76 

.  77 

.  77 

.  10 

.  64 

. . .  81 

.  81 

.  81 

.  79 

.  80 

.  80 

.  78 

. . .  78 

. . _....  90 

.  108 

. 18-19 


UNIVERSITY  OF  ILLINOIS 


UNIVERSITY  OF  ILLINOIS-URBANA 


A 


3  0112  064193631 


